What Is OPEC?

Answer:

The Organization of the Petroleum Exporting Countries (OPEC) was created in 1960 to unify and protect the interests of oil-producing countries.

OPEC allows oil-producing countries to guarantee their income by coordinating policies and prices among them. This unified front was created primarily in response to the efforts of Western oil companies to drive oil prices down. The original members of OPEC included Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC has since expanded to include seven more countries (Algeria, Angola, Indonesia, Libya, Nigeria, Qatar, and United Arab Emirates) making a total membership of twelve.

Together, these countries supply about half of the world’s oil needs and control about two-thirds of the world’s known oil reserves.

OPEC-imposed crude oil embargos have both short-term and long-term effects. In the short term, crude oil prices skyrocket, leading to inflation and economic recession.