The mission statement for the Organization of Petroleum Exporting Countries stat

Question

The mission statement for the Organization of Petroleum Exporting Countries states, “the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.” Explain why the OPEC members often disagree on how much petroleum each country should produce.

Explanation / Answer

Answer: OPEC is regarded as the one of the strongest cartels in the world. It can destabilise the world economies by changing the price of oil in international market. But recent various incidents show that there is always disagreements among the OPEC memebers. OPEC is cartel and in cartel there is large scope of cheating and cornering the profits. Further, these countries are ideologically different and different members also share the varied relationships with non-member countries. All these factors contribute towards the disagreement on who much petroleum each country should produce. Further, technically different members countries have different reserves of petroleum and technology at disposal for extracting it. Last but not least domestic parameters also undergo the changes which may lead to deficiency in production of petroleum.

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