OPEC: Most Global, Most Powerful

Which company(ies) in your industry are most global? What has been the key to their success in other countries?


OPEC, the Organization of the Petroleum Exporting Countries, has members from the most resource-rich countries for oil in the whole world. Their members currently include 12 strong nations; Algeria, Angola, Ecuador, Iran, Iraq, Kuait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela, making it the most global and powerful oil company in the energy industry. In the graph below, you can see that the countries involved in OPEC produce the most amount of oil in the entire world.

OPEC has "so much power of the cartel that controls its price." In the past it has been able to completely control the price of crude oil as high as $100 per barrel in today's money equivalent and therefore this forces countries to really use the oil they invested in. As seen in the graph below, for the total amount of crude oil available for production in the world across the biggest producing countries in the world, OPEC is a part of a significant amount.

In order to create a strategy for success, OPEC controls the amount of oil they produce today in order to control prices, despite the amount of oil that they could potentially produce. This strategy helps them to create reasonably priced oil for its consumers, and still control much of the oil supply in the world. This could also be useful with respect to the recent worry that the world's oil quantity is going to fall eventually. Major consumers of oil such as China, India, and the Middle East are increasing their demand for oil causing OPEC to keep producing slightly rising the price of oil per barrel. However even if the oil prices in Europe and North America keep increasing, decreasing the demand in these regions, OPEC still has major countries to provide oil to.

Resources:

http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2010_2011.pdf

http://www.economist.com/node/10094795