OPEC celebrates 60 years of its foundation with new remains due to the pandemic

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On the occasion of the 60th anniversary of its foundation this Monday, the Organization of Petroleum Exporting Countries (OPEC) has assured that it will continue working to achieve the stability of the oil market.

In addition, this group of thirteen nations recalls in a statement the “pioneering” vision of the Venezuelan Juan Pablo Pérez Alfonso and the Saudi Abdullah al-Tariki, considered the “fathers” of OPEC, when promoting an unprecedented project to face to the dominant power that the great international oil companies.

A heroic act

The work of Pérez Alfonso, Minister of Mines and Hydrocarbons from 1958 to 1963, and his Saudi counterpart was key to the creation of the new organization, which they founded together with Iraq, Iran and Kuwait, at a conference in Baghdad on September 10-14, 1960.

“In the context of that time, in which the oil industry was dominated by the major oil companies (…) it was a heroic and pioneering act of the founding members to meet in the Iraqi capital “with the” premise of cooperating and writing their own history, “the note states.

The declared objective was to defend a natural resource such as oil, non-renewable and of an accelerated consumption that, on the other hand, then deprived the countries that extracted it of a remuneration in accordance with their strategic value.

A year later the first statutes of the organization were approved in Caracas, which today has 13 members and is recognized by United Nations as an intergovernmental entity.

Your goals and results

In the press it has been frequently branded a “cartel” due to the policy of set prices which it maintained with little success, before moving on to the current practice of setting maximum production caps, which usually involves turning the taps off when prices plummet and turning them on when prices spike.

The adjustments of these quotas and other decisions are adopted by the ministerial conference, its executive body, made up of the ministers of the sector of each country. “What is clear is that what was put in place has stood the test of time; OPEC continues to have the same basic objectives, of order and stability in the world markets of oil “, affirms in the communiqué the secretary general of the organization, Mohamed Barkindo.

The new reality

Despite the serious crisis faced by oil exporting countries due to the coronavirus pandemic, which has caused an unprecedented collapse in world energy consumption, Barkindo says that the Vienna-based entity that he directs “is prepared to face the many challenges” that await it in the future.

In addition, it announces that the anniversary will be celebrated in Baghdad, although the date is unknown at the moment, after having been postponed due to the pandemic of the COVID-19 the festivities that were already prepared.

The new virus has led the organization and its allies, including Russia, to apply this year the largest cut in oil production that has been seen in the history of the sector, in order to compensate for the extraordinary excess supply and prop up the collapsing prices per barrel.

The reduction of 9.7 million barrels per day (mbd), entered into force on May 1, according to a two-year phased plan that will gradually moderate it, as the market recovers. The next OPEC ministerial conference is scheduled for November 30 in Vienna.

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