Critique of the OPEC Website - Assignment Example

Critique of the OPEC Website Introduction The Organization of the Petroleum Exporting Countries or OPEC was established primarily for oil producing and exporting countries to unite them into one entity to facilitate coordination among them. OPEC aims to solidify the major producers in the petroleum industry to foster a steady stream of income and at the same time ensure reasonable returns on invested capital. The organization purports that it wants to stabilize the oil market so that there will be a constant supply of petroleum to the consuming public. OPEC was created during the September 1960 Baghdad Conference by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela (the founding members) (Brief history par. 1). Other countries later joined the organization, namely Qatar, Indonesia (withdraw on January 2009), Socialist Peoples Libyan Arab Jamahiriya, United Arab Emirates, Algeria, Nigeria, Ecuador (suspended its membership from December 1992 to October 2007), Angola and Gabon. Its main headquarters transferred from Geneva, Switzerland to Vienna, Austria on September 1, 1965 (Brief history par. 1). OPEC created its website to spread its advocacy and disseminate updated information on its activities and other relevant issues and concerns. OPEC rose to power when the balance shifted from the oil companies to oil producing countries following Venezuelan policy of a 50-50 share in profits that the oil companies had to concede to and more terms they later demanded (“History” 1). Website’s Main Parts OPECs main webpage can be found at http://www.opec.org/home/ (OPEC n. pag.). In the body of the webpage, a title is located at the top. This contains the name of the organization. At the top of the title box are dynamic links that move from right to left. The links refer to various articles on OPEC, oil price, seminar, etc. In line with the title box on the right side are two levels of navigation bar. The first level at the top contains contact, feedback, vacancies and warning. The second level below refers to home, about us, library and news. Below the title box at the left, placed vertically is another set of navigation bar (side navigation) with links for search, advance search, press room, multimedia, publications, organigram, meetings, announcements, login, links and graphs. Set below this vertical placement is a livewebcast (rich media live streaming for official meetings of the organization), followed by Monthly Oil Market Report Podcast, then the banner for World Oil Outlook, and banner for Annual Statistical Bulletin 2007. Located below the title box on the right side, OPEC features its press conference on OPEC publications to be held in Austria on July 8, 2009. The conference is emphasized with bold huge fonts. Below this feature conference is the mission of OPEC. The area below mission was divided into two sections. The section on the left (viewed as the center column of the webpage) is the OPEC Basket Price, followed by the links for OPEC Upstream Investment, OPEC Downstream Capacity and OPEC Oil Reserves. This is followed by a section entitled Who Gets What From Oil. The section on environment located next below features the following links, namely: OPEC statement to the COP, environmental newsletter, environment on the internet, environmental events, and glossary of terms. The section of the right features three press releases, followed below it by publications (on Oil Market Report June 2009 and OPEC Bulletin June 2009), and speeches. At the lowermost portion of the webpage is the footer containing the name of the organization, the copyright year, terms and conditions, and a warning on the fraudulent use of its official logo. Assessment and Response to Presentation The overall presentation of the website is simple and concise. The navigation bars at the top (horizontal) and side (vertical) are well-placed that would be easily seen. Separating the navigation bars into two groups decongest the links and not cramp them up together. On the side navigation bar, only the press room link has pull down menu while the rest leads directly to the target webpage. The website tries to present all relevant information regarding the organization. However, there are links on the webpage that lead to the same target page. With the various activities OPEC has engaged in and many documents it has to present, the layout of the homepage is able to accommodate everything in one page. It is only be clicking the links that more information will be opened to the user. There is also information that is not shown on the homepage. For instance, it would seem that the link on vacancies would only lead the available job at OPEC. But upon clicking the link, the user will be lead to a page that contains not only the vacancies but also another link on OPEC Governors. Many of its publications are in PDF format that can be downloaded for free by users. The color combination of the sections of the website does not irritate the eyes and appropriately chosen. Conclusion It can be said the OPEC website tries to project that it is transparent and open for public scrutiny. Thus, it presented its organizational chart (organigram), its history, resources, relevant information, activities and other matters. It has the objective of unifying the petroleum policies of its members, achieve a reasonable and “stable prices for petroleum producers,” to foster continued supply to consumers and attain an equitable return for capital invested (Brief history par. 1). But from other scholarly discourses, it was revealed that OPEC intentionally manipulated oil prices to the financial gain of its members. OPEC is exercising its own right by publishing information on its own advocacy or objective but contrary information about price manipulation exists in other literatures. Thus, the article History of OPEC mentioned that OPECs objective as a cartel was to limit production in order to boost the prices of oil (“History” 1). Regular meeting was held to discuss policies that would hinder the prices and profits from falling (“History” 1). OPEC then pegged price which is “posted” rather than based on market forces (“History” 1). Oil embargo is also used by OPEC members as a tool to further their political agenda (i.e. an embargo against the Nixon administration when the latter proposed military aid to Israel) (“History” 3). This position is agreed upon in the article The Real Oil Problem that mentioned that OPEC destroyed the global economy starting the year 1970 by acting together to restrict supply to increase the price of oil (Adelman 16). The cost of increasing the output covers just a minute segment of the price OPEC members charge for their oil products (Adelman 19). The member countries would cease expansion to keep the prices and profits on a high level (Adelman 20). Fixing the price is done by trial and error. This is exemplified in 1980 when OPEC mistakenly pegged oil to $40 per barrel in the hope of higher prices in the future but resulted to dwindling demand (Adelman 20). Thus, the members were forced to lessen the price back to lower level (Adelman 20). Saudi Arabia decided to produce oil surplus in order to meet “potential oil shocks” (Stevens 24). In 1985, it embarked on lowering the oil price to persuade consumers to use oil again for their energy needs (Stevens 24). OPEC, together with other International Oil Companies (IOCs), prevented the surplus to go to the market and thereby put a pressure on prices to go down (Stevens 24). This view, however, is opposite the first view earlier cited because suppression of surplus to go to the marker resulted to lowering of prices. OPEC estimates the requirement for crude and distributes the allocation among member countries to which Stevens (2002 cited in Stevens 24) referred as “the classic cartel problem of cheating.” During the conference in Bali, OPEC expressed its concern on the environment and climate change (El-Badri, “OPEC” par. 2). The OPEC Secretary General said the developing countries are generally responsible for the swelling greenhouse gas emissions with almost 50 percent of the total emissions while those countries comprise only 20 percent of the world’s population (El-Badri, “OPEC” par. 4). OPEC takes notice of the efforts by the developing world to counter climate change but emphasizes the failure of developed countries to meet its commitment on the reduction of their emissions (El-Badri, “OPEC” pars. 7-8). The Secretary General, however, stressed on the release of Saudi Arabia of $300 million and $150 million each by Kuwait, Qatar and the United Arab Emirates to fund technological research to preserve the environment (El-Badri, “OPEC” par. 7). Other governments saw the need for private sector involvement in the oil industry. Thus, a positive trend moves toward the involvement of the private sector in the oil industry in order to deregulate it (Stevens 26). The governments in the US and Europe divested some of their ownership to keep the competition (Stevens 26). OPEC describes its members as generous in granting assistance and financial aid to 140 developing countries that ranged from hospitals (e.g. Albania, Senegal), schools (e.g. Jamaica, Burkina Faso) and roads (e.g. Bangladesh, Ethiopia, Honduras) (OPEC member 34). Its financial support has provided social services, clean water, sanitation, electricity, enhanced food security and nutrition (OPEC member 34). The OPEC Fund has also provided loans and grants to advance the economic and social plight of developing and underdeveloped countries (OPEC member 34). OPEC Fund has the following members: Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela (OPEC member 34). The fund also boasts of its debt relief program to around 25 Heavily Indebted Poor Countries (HIPC) that totals $241.3 million (OPEC member 37). Moreover, it has also set up three specialized account for grants to special projects – the HIV/AIDS Special Account, a Special Food Aid Account, and a Special Account for Palestine (OPEC member 37). With recession looming around, OPEC took responsibility to turn the “global economy around” (El-Badri, “What” par. 6). The Secretary General acceded to the fact extreme prices affects the consumers (El-Badri, “What” par. 8). But during the early part of 2009 when the price of oil per barrel was declining due to lesser demand ($32 per barrel as of December 2008) as a result of the economic recession, OPEC decided to lessen production to boost up the price (“Organization” par. 2). Led by Saudi Arabia, the members cut production by 3 million barrels a day (corresponding to 5 percent of the world production) (“Organization” par. 3). The consumers have been benefiting from this natural decline in price but OPEC tried to manipulate the price through production reduction with the aim of maintaining its profits. The website then has concealed some significant truths about what it did behind the scene. The speeches delivered by its representative portray some truths in its favor. However, it has also shown its advocacy for the environment and assistance to developing nations which the organization has actually implemented. The website has attained its purpose in delivering its message to its intended audience. The speeches delivered by the Secretary General has argued logically on the issues raised and if not aware of what OPEC has done before or behind the scene, the audience might believe that everything that was said was correct. Works Cited Adelman, M.A. “The Real Oil Problem.” Regulation, 27.1 (Spring 2005) : 16-21. Brief History. Organization of the Petroleum Exporting Countries. 2009. 3 July 2009 . El-Badri, Abdalla Salem. OPEC Statement to the United Nations Climate Change Conference - Bali, 11-14 December 2007. Speech delivered on the 13th session of the Conference of the Parties to the UN Framework Convention on Climate Change & the 3rd session of the Conference of the Parties acting as the Meeting of the Parties to the Kyoto Protocol. 1 July 2009 . El-Badri, Abdalla Salem. What does the future hold for the oil industry? Speech delivered on the 10th International Oil Summit on 2 April 2009, Paris, France. 2 July 2009 . History of OPEC. University of Pennsylvania. 1 September 1998. 22 August 2001 . OPEC. Organization of the Petroleum Exporting Countries. 2009. 30 June 2009 . OPEC Member Countries help ease plight of world’s poorest people. OPEC Bulletin (November 2007) : 34-39. Organization of the Petroleum Exporting Countries. The New York Times. 16 March 2009. 2 July 2009 . Stevens, Paul. “Oil Markets.” Oxford Review of Economic Policy, 21.1 (2005) : 19-42. Read More