Critique OPEC website - Essay Example

OPEC Website Critique The Organization of the Petroleum Exporting Countries(OPEC), created in 1960 is an entity of 12nations namely Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Algeria, Angola, Indonesia, Libya, Nigeria, Qatar, and United Arab Emirates with first five being the founding member of the organization. Though the purpose of the organization is to unify and protect the interests of oil-producing/exporting countries but in actual sense OPEC presents itself as force of political and economical significance. OPEC members have control over two-thirds of the oil reserves and are responsible for almost half of the worlds oil exports. As oil is the most sought after commodity for the modern world; hence in this 21st century this OPEC has become the one of the most powerful organization to reckon with (UPENN). The international petroleum industry has a history of bearish tendency of restricted supply for high profits. OPEC right from its inception has maintained this policy with various instances of export embargo as well as production cut but at the same time has been quite successful in presenting its case as a joint effort to protect its members from possible exploitation by industrialized countries. For this purpose, it has used several means of propaganda and its website http://www.opec.org/ has been quite effective in projecting the serious aspect of OPEC’s loquacious inducements of using oil as a tool of diplomacy, intimidation and restitution in addition to already mentioned prowess as an economic and political entity. The details and information that have been made available through this website is the sharp example of how fastidious OPEC is about its appearance or presentation to the entire world. The home page of OPEC website in the first instance provides the OPEC basket price of crude oil as per last update in US dollars. The archive in the same frame links to date wise chart/graph of the crude oil per barrel. The look and feel of the website is similar to many other websites where leftmost column as well as row at to-right portion of template containing links to other pages of the website. Links to ‘Multimedia’, ‘Publication’, ‘Announcements’, ‘Login’ etc. are in the left panel while the links at the top right portion is for ‘Home’, ‘Library’ ‘News’, ‘Contact’, ‘Feedback’ etc. The rhetoric aspect of the website can be understood from the importance it associates with the OPEC meetings. The front of the home page links to 152nd OPEC meeting supposed to be held on 15th March 2009 at Vienna, Australia. The OPEC has always tried to add importance to everything that is associated with it. It includes OPEC meetings, OPEC International Seminars, OPEC Secretary General Interviews and among all this it gives a very crafty message: “OPECs mission is to coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry. (OPEC)” Other frames in the home page of http://www.opec.org/ links to OPEC members’ oil reserves, Publications, Environment, World Price Outlook, Speeches and Press Release. Beginning with the OPEC Environmental link, the OPEC Quarterly Environmental Newsletter as per the webpage prepared by the Energy Studies Department at the OPEC Secretariat in Vienna in form of a compilation of various news articles on environmental issue. Though these newsletters are quite informative but in none of them contained any articles related to the contributions made by OPEC on environmental issues. Again to nullify various allegations of higher revenue gain through production cut, OPEC website links to the OPEC facts and figures for “Who gets what from oil?”. Through this page, OPEC has tried to explain that for the cost of crude is not only the responsible entity price in market price of oil in various developed nations and its been the varying levels of taxation that has been presented as the major culprit behind the high cost of fuel. But at the same time, OPEC failed in providing the impact of higher oil prices on world economy and various oil importing third world countries. The World Oil Outlook 2008 is another way of seriousness that OPEC has tried to introduce to its efforts to highlight various entities that add to the uncertainties to world oil industry and hence providing a way for further understanding for its member nations as well as nations all over the world about the bleak future of oil industry and how OPEC and its member nations are preparing for the same (Oxford Review, 23). And this preparation begins with the production cut in recent times meant for revenue growth. This decision started causing effect from late 1999 with oil prices got doubled by the end of the year while the production was forced to fell below consumption causing a deficit. Global reliance on OPEC nations for petroleum is also very important in this scenario. Around two-thirds of global oil reserves are concentrated in Middle East members of OPEC. Relatively new and outside Middle East resources are small and are very expensive to develop (Organization for Economic Cooperation and Development [OECD], 2004, p.1). With OPEC’s policy of maintaining lower excess capacity often fails to meet the issue of raising supply in the event of unexpected disruption. This low quantity has made the market more volatile and is highly sensitive to short term supply changes. OPEC has become important that the market pays full attention to it irrespective of the case that it is in the state of action or inaction (IMF, 2000, p. 6). OPEC nations, with the motive to maximize the profit and earn as much dollars as they can, have made a policy of artificially restricting the supply of oil (Hoguet, 2005, p.1). Analysts have predicted that a rise of $10 in the price of petroleum per barrel will reduce the growth of world economy by 0.3 percent (Hoguet, 2005, p.3). But OPEC’s Long Term Strategy Document shows something else. Instead of giving some certain projection to the volume which they will produce to keep the price of petroleum away from steep hike, the document adds more to the uncertain nature to the petroleum market (Mitchell, 2006, p. 12). Disappearance of surplus capacity by these nations is adding more to the uncertainty factor raising a big question of their ability to absorb the uncertainties of supply and demand (Mitchell, 2006, p. 12). Way back in 1980, a US Congress Report had stated that the OPEC oil price is the cartel price which is believed to be much higher than the price that should be charged to this oil thirsty world (Congressional Budget Office [CBO], 1981, p. xix). Conclusion Delving deep into the issue of oil price rise, a number of causes came into focus. The list of reasons starts with restrained production policy of OPEC nations. These nations have the upward trend of oil production since 1999 (International Monetary Fund [IMF], 2000, p. 4) and have added more problem to the economic crisis that raised its head in 2008 and is still continuing. Though the prices have again fallen to the almost less than one third of the peak value of US $145 per barrel but it’s the recession that is responsible for this fall rather than OPEC nations’ contribution towards economic partner to the world as whole. But the same OPEC nations have employed every means to project itself as a very responsible organization with main role as a regulatory body rather than a controlling one. OPEC website is one of the mouthpiece or better to say a means through the use of electronic media. The website has been developed quite efficiently in pursuing the goals of OPEC as a tool for information and image broadcasting. OPEC seeks importance of global value and international acceptance behind its every action and that is what its website has successfully been able to convey. References OPEC http://opec.org Organization for Economic Cooperation and Development (2004). Oil Price Developments: Drivers, Economic Consequences and Policy Responses, France, p. 1, 3. Hoguet, G (2005). Oil and Controlled Distortions in the World Economy and Their Long - Term Industrial Implications, State Street Corporations, p. 1, and 3. Mitchell, J. V. (2006, August). A New Era for Oil Prices, Royal Institute of International Affairs, London, p. 12. International Monetary Fund (2000, December). The Impact of Higher Oil Prices on the Global Economy, Research Department, p. 4, 6 & 12. Congressional Budget office (1981, February). The Effect of OPEC Oil Pricing On Output, Prices, and Exchange Rates In the United States and Other Industrialized Countries. p. xix. The Oxford Review Oil Markets Regulation The Real Oil Problem [UPENN] University of Pennsylvania History of OPEC http://www.ssc.upenn.edu/polisci/psci260/OPECweb/OPECHIST.HTM Read More