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OPEC - Organization of Petroleum Exporting Countries �

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Purpose and origin:�In 1960, many oil-rich nations joined together to control the production and price of oil.

1st OPEC Conference, Baghdad, September 10–14, 1960

http://www.opec.org/aboutus/history/history.htm

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➢Original Members�Iran�Iraq�Kuwait�Saudi Arabia�Venezuela��

http://www.opec.org/aboutus/history/history.htm

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There are 12 member countries total: 4 in Africa, 2 in Latin America, and 6 in the Middle East (Southwest Asia). �(That’s 3 different continents)

http://en.wikipedia.org/wiki/Image:Opec_Organization_of_the_Petroleum_Exporting_Countries_countries.PNG

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OPEC countries produce about 40% of the world's oil.��They have about 2/3 or the world’s oil reserves.

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http://content.answers.com/main/content/wp/en-commons/thumb/3/37/400px-Chart-of-Oil-Trading-Nation.gif

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When OPEC decides to produce less oil, the supply of petroleum drops. ��But the demand stays high, so the price goes up since there’s less to go around.

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When they produce more, prices go down.

That’s explained by the economic law of “supply and demand.”

http://moodle.smithtown.k12.ny.us/file.php/231/gasoline-supply-demand.jpg

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LOW demand & HIGH supply = �very low price!

http://www.reverendfun.com/add_toon_info.php?date=20130329&language=en

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But HIGH demand & LOW supply = �very HIGH price!

http://3.bp.blogspot.com/_b20ZX7pAH8k/S48Br_HGUoI/AAAAAAAAAAc/V78sPzexWGI/s320/supply+and+demand.gif

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Many developed countries depend on other countries for the HUGE amounts of energy they need.

Cartogram of energy consumption

http://www-personal.umich.edu/~mejn/cartograms/energyconsump1024x512.png

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In 1973, OPEC refused to ship oil to countries that had supported Israel in a war against Egypt and Syria. The result here was the “1973 energy crisis.”

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http://www.cvce.eu/content/publication/1999/9/16/e2341257-db3c-4d00-b836-d19903d52762/publishable.jpg

1973 political cartoon

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That led to a shortage of gas here. The price of oil quadrupled. And even with high prices, many gas stations sold out of gas.

http://www.biocrawler.com/w/images/thumb/7/76/350px-Energy_crisis_-_oild_sold_out.jpg

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Even today, oil prices around the world continue to rise.�� OPEC has been only part of the cause.

http://successsystemsnow.com/wp-content/uploads/2011/03/RisingOilPrices.jpg

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Demand for energy is also rising world-wide. That brings higher prices.

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The U.S. is the world’s biggest energy consumer, using much more energy than we produce. So high oil prices hit us hard!

Cartogram of energy consumption

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After the U.S., China is the biggest consumer of energy. Since 2000, there has been a huge boom in car purchases in China. The same thing seems to be happening in India.

http://www.all-creatures.org/hope/gw/China's_oil_consumption_1980-2006.jpg

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Our government wants us to become less dependent on foreign energy sources.

But it’s not a simple or fast process.

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OPEC Headquarters in Vienna, Austria

While the world depends on fossil fuels, OPEC is a way for less-powerful nations to band together and use their economic power.

http://content.answers.com/main/content/wp/en-commons/thumb/e/e0/250px-OPEC01.jpg