Note: EIA's analysis of world oil markets has been consolidated into its Short-Term Energy Outlook (Outlook). Please refer to the Outlook for updated information on OPEC quotas, production, and production capacity levels.

The Organization of Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, in September 1960, to unify and coordinate members' petroleum policies. OPEC members' national oil ministers meet regularly to discuss prices and, since 1982, to set crude oil production quotas. Original OPEC members include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Between 1960 and 1975, the organization expanded to include Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), and Nigeria (1971). Ecuador and Gabon were members of OPEC, but Ecuador withdrew in December 1992, and Gabon followed suit in January 1995. Although Iraq remains a member of OPEC, Iraqi production has not been a part of any OPEC quota agreements since March 1998. EIA estimates that the current eleven OPEC members account for about 40% of world oil production, and about 2/3 of the world's proven oil reserves.

OPEC PRICE BAND
OPEC collects price data on a "basket" of crude oils, and uses average prices for these oil streams to develop an OPEC reference price to monitor world oil market conditions. From January 1, 1987 to June 15, 2005, OPEC calculated an arithmetic average of seven crude oil streams, including: Algeria's Saharan Blend, Indonesia Minas, Nigeria Bonny Light, Saudi Arabia Arab Light, Dubai Fateh, Venezuela Tia Juana and Mexico Isthmus (a non-OPEC oil) to estimate the OPEC basket price. This OPEC basket price averaged $50.71 per barrel in 2005, $36.05 per barrel in 2004, $28.10 per barrel in 2003, $24.36 per barrel in 2002, $23.12 per barrel in 2001, and $27.60 per barrel in 2000.

According to current estimates, more than three-quarters of the world’s oil reserves are located in OPEC countries. The bulk of OPEC oil reserves is located in the Middle East, with Saudi Arabia, Iran and Iraq contributing 56% to the OPEC total. OPEC countries have made significant contributions to their reserves in recent years by adopting best practices in the industry. As a result, OPEC proven reserves currently stand well above 900 billion barrels.

World Oil Outlook

The OPEC Secretariat has, for many years, produced a medium- to long-term outlook of the global oil scene. Results and analysis have offered insights into many important issues that producing countries and the oil industry have been, and may be confronted with in the future. These have long been shared in various international fora where the interests and concerns of all players are discussed.