Bahrain's Role In Opec: A Key Member?

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization that coordinates and unifies the petroleum policies of its member countries. OPEC was founded in Baghdad, Iraq, in 1960, by five countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC's primary objective is to manage the supply of oil to stabilize prices in the international oil markets, preventing fluctuations that could impact the economies of both producing and purchasing nations. While OPEC has a core group of member countries, it also collaborates with non-OPEC oil-producing countries, such as Bahrain, through declarations of cooperation to achieve stability in the oil market.

Bahrain is a non-OPEC country

Bahrain is not listed as one of the current OPEC member countries. However, it has received funding from the OPEC Fund for International Development. Bahrain has also been referred to as an OPEC+ or non-OPEC country, and has participated in OPEC's Declaration of Cooperation, which seeks to achieve oil market stability.

OPEC+ countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan. These countries are not full members of OPEC, but they work with the organisation to achieve its aims, particularly in terms of stabilising the oil market.

As a non-OPEC country, Bahrain does not have the same level of influence or involvement in the organisation as full members. However, its participation in the Declaration of Cooperation and its receipt of funding from the OPEC Fund for International Development indicate a degree of engagement and alignment with OPEC's goals and initiatives.

OPEC's role in stabilising oil prices

OPEC, or the Organisation of the Petroleum Exporting Countries, was founded in 1960 in Baghdad, Iraq, by five countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Since then, it has added several more members, including Bahrain.

OPEC's influence on oil prices is also shaped by its dominant market position, controlling about 40% of global oil supplies and more than 80% of proven oil reserves. This significant control gives OPEC substantial influence over prices, especially when coupled with its ability to exert production adjustments, as seen in 2017 when it agreed to cut production to stabilise prices.

Additionally, OPEC's decisions are backed by actions from its member countries, who have increased production to prevent supply shortages and maintain a comfortable cushion of spare capacity. This proactive approach sends a strong signal to the market and can have a stabilising effect on market sentiment.

OPEC also considers future needs and uses its World Energy Model to construct scenarios for market evolution, ensuring a sustainable supply of oil for the short, medium, and long term.

However, OPEC's influence has limits, as seen in 2020 when Saudi Arabia and Russia failed to agree on production cuts during the COVID-19 pandemic, resulting in a sharp increase in supply and a collapse in oil prices.

In conclusion, OPEC plays a crucial role in stabilising oil prices by regulating supply, leveraging its dominant market position, and considering future needs. While its influence is substantial, it is not absolute and can be challenged by individual nations' agendas and market forces.

OPEC's founding and history

OPEC, or the Organization of the Petroleum Exporting Countries, was founded in Baghdad, Iraq, in September 1960. The first five members, or founder members, were Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. These countries signed an agreement to coordinate and unify petroleum policies among member countries, in order to secure fair and stable prices for petroleum producers, an efficient and economic supply of petroleum to consuming nations, and a fair return on capital to those investing in the industry.

The formation of OPEC marked a turning point toward national sovereignty over natural resources. OPEC's decisions have come to play a prominent role in the global oil market and international relations.

In the years following its founding, OPEC grew as Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Gabon, Angola, Equatorial Guinea, and the Republic of the Congo joined the organization. OPEC's membership peaked at 13 countries in 1975. However, several countries have since left the organization, and as of 2024, OPEC has 12 member countries.

Over the years, OPEC has faced challenges such as market volatility, competition from non-OPEC oil producers, and internal disputes among member countries. Despite these challenges, OPEC has continued to seek stability in the global oil market and enhance its cooperation with producers, consumers, and international organizations.

OPEC membership requirements

OPEC, or the Organisation of the Petroleum Exporting Countries, is a cartel that enables cooperation between leading oil-producing and oil-dependent countries. OPEC was founded in Baghdad, Iraq, in 1960, by five countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC currently has 12 member countries, and these nations collectively account for an estimated 30% of global oil production.

The OPEC Statute distinguishes between the Founder Members and Full Members. The Statute stipulates that "any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members."

Therefore, the requirements for OPEC membership are that the country must have a substantial net export of crude petroleum, and its interests must align with those of the current members. Additionally, the application for full membership must be accepted by a majority of three-fourths of Full Members, including the unanimous agreement of all Founder Members.

The OPEC Statute also provides for Associate Members, which are countries that do not qualify for full membership but are admitted under special conditions prescribed by the Conference.

OPEC's headquarters

OPEC, or the Organisation of the Petroleum Exporting Countries, is an intergovernmental organisation that was founded in Baghdad, Iraq, in 1960. It is a cartel that enables leading oil-producing and oil-dependent countries to collectively influence the global oil market and maximise profits.

The OPEC headquarters are in Vienna, Austria, and have been since 1965. The organisation's first headquarters were in Geneva, Switzerland, where it was based for the first five years of its existence.

The headquarters are also the location of the OPEC Secretariat, the executive organ of the organisation. The Secretariat is responsible for implementing all resolutions passed by the Conference and carrying out decisions made by the Board of Governors. It also conducts research, which informs decision-making.

The Secretariat consists of the Secretary General, who is the Organisation's Chief Executive Officer, as well as any other staff required for the Organisation's operations. It also includes the Office of the Secretary General, the Legal Office, the Research Division, and the Support Services Division.

The Research Division comprises Data Services, Petroleum Studies, Energy Studies, and Environmental Matters departments. The Support Services Division includes Public Relations & Information, Finance & Human Resources, and Administration & IT Services departments.

Frequently asked questions