The institutions and other organisations

OPEC

OPEC (the Organisation of Petroleum Exporting Countries) was founded in 1960 by Iraq, Venezuela, Saudi Arabia, Kuwait and Iran. At the beginning, the main objective of this organisation was to redress the split of income between the oil producing countries and the oil companies, in favour of the former. Conscious of the interests of its members, the organisation has become an important stabilising element for petroleum prices since the 1990’s and continues to play this role today. It is also, without any doubt, the first organisation to have demonstrated wisdom in the management of the petroleum resources of the planet.

OPEC works on the principle of limiting oil production by means of the allocation of quotas (authorised maximum quantities) to each of its members according to their reserves. These quotas are adjusted, at regular or extraordinary meetings, to take account of the state of the world economy and its requirements. Until recently, at least when the quotas were respected by its members, this system allowed OPEC to fix a range for oil prices and thus to maintain price stability. This stability is, of course, beneficial for the whole world. But since 2004, OPEC production has been working at almost full capacity and the possibilities of increasing production further, (what is called excess capacity), have become very limited. As a result, OPEC has virtually lost its ability to control prices, which have tended to soar since demand for oil has threatened to exceed world supply.

At the beginning of 2008, OPEC comprised 13 members :

The International Energy Agency (IEA)

OPEC is an organisation of producer countries. The IEA, on the other hand, is an association of consumer countries. As at the beginning of 2008, it consists of 27 members (soon to become 28 with the arrival of Poland), all of which are industrialised countries and major hydrocarbon users. It is an intergovernmental organisation for the co-ordination of energy polices. The IEA works towards security of energy supplies, economic growth and environmental protection. In addition, governments of the member countries have undertaken to implement joint measures to deal with emergency situations concerning petroleum supplies. They have also undertaken to pool information. The IEA keeps a sharp eye on the evolution of oil markets, and also plays a more and more important role in the protection of the environment. In a completely new and unexpected step, the IEA made a report public on the 28 th of April 2005, in which it recommended consumer countries to take preparatory steps to limit their oil consumption. It even gave examples of measures that could be introduced in this direction:

3 years after the publication of this report, it is possible to measure the very limited extent to which these recommendations have been followed in the rich countries.

The IEA is an autonomous unit within the Organisation for Economic Co-operation and Development (the OECD). It was created in 1974, at the initiative of the United States, as a reaction, both to the OPEC offensive when petroleum prices rocketed at the end of 1973, and to the use of oil as an economic arm by Arab countries. With regards to the Kyoto protocol, the IEA seeks to establish common ground and compromise solutions between signatories and non-signatories (the United States, isolated since ratification of the protocol by Australia in December 2007).