Tomáš Michlík DiS.

TM-System - Tomáš Michlík DiS.

Opec Production Quota Agreements

In addition to THE OPEC members, the other 10 oil-exporting countries, led by Russia, will be grouped together in 2016 under the title of OPEC cartel, as they cooperate in setting world crude oil prices by agreeing production quotas, so that world production is below global demand/global consumption. [139] [140] OPEC countries encourage unnecessary excess capital investment in the global oil sector, rather than encouraging their cheaper oil production with less capital investment. [141] [142] In the 1990s, OPEC lost its two youngest members who joined in the mid-1970s. Ecuador withdrew in December 1992 because it was unwilling to pay the US$2 million annual dues and estimated that it had to produce more oil than was allowed by the OPEC quota,[65] although it re-joined in October 2007. Similar concerns led Gabon to suspend its membership in January 1995; [66] In July 2016, she was reinstated. [2] Iraq has been a member of OPEC since the creation of OPEC, but Iraqi production was not part of OPEC quota agreements between 1998 and 2016 due to the country`s frightening political difficulties. [67] [68] The formation of OPEC marked a shift towards national sovereignty over natural resources, and OPEC decisions play a major role in the global oil market and in international relations. The effect can be particularly strong when wars or civil disturbances cause prolonged supply disruptions. In the 1970s, restrictions on oil production led to a dramatic rise in OPEC oil prices, incomes and wealth, with lasting and significant consequences for the global economy. In the 1980s, OPEC began setting production targets for its member countries; if targets are lowered, oil prices rise.

This last occurred on the decisions made by the organization in 2008 and 2016 to reduce oversupply. The U.S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, defines unused capacity for crude oil market management „as a volume of production that can be introduced within 30 days and can be maintained for at least 90 days… OPEC`s unused capabilities are an indicator of the ability of the global oil market to respond to potential crises that reduce oil supplies. [61] In 2016, the tide was partially cut off offline with significant production in the United States, Canada, Libya, Nigeria and China, and the price of the basket gradually increased in the 1940s. OPEC regained a modest percentage of market share, with many competing drilling projects cancelled, maintained the status quo at its June conference, and approved „prices at levels that are suitable for both producers and consumers,“ although many producers still experienced serious economic difficulties. [94] [95] [96] [97] As of January 2020, OPEC has 13 member countries: five in the Middle East (Western Asia), seven in Africa and one in South America. According to the United States

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