Who Determines the Oil price:

There are many countries owning oil resources but the amount of these resources is different and important. Those with higher amount of resources and export volume play the main roles in oil price determination.

The following countries have oil reservoirs: Saudi Arabia, Iran, Russia, United Arab Emirates, Canada, Iraq, United States, Kuwait, China, Venezuela, Libya, Nigeria, Brazil, Mexico, Qatar, Kazakhstan, Algeria, Egypt, Oman, Colombia, Equatorial Guinea, Sudan, Brunei and Gabon.

Who are OPEC Members:

But among all these 24 countries, 13 of them are the one who play the main role in Oil price determination. These 13 countries are grouped together under an organization called OPEC. The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.

Other countries joined these organization later as Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971),

Gabon (1975), Angola (2007), Equatorial Guinea (2017) and Congo (2018).

What are Other Factors Influencing Oil Price:

Three main factors normally affecting oil price such as Cost of production, Supply and demand Market, and Market Sentiment.

The cost of production is annually increased based on interest rate on energy costs and cost of living relatively. Another factor is Supply and demand market which is caused by Economic growth. That is when economic growth happens, the higher demands for energy consumption  happens especially in transport of goods. World Transportation depends solely on Oil derivation products. As much as demand is higher than supply,  price goes up. And the final factor is Market trends (Sentiment) which is under control of world political matters such as War, or potential trade wars, and also substitute energy sources.  Many countries having rich oil reservoirs are usually politically unstable. Political instability may influence supplies and cause price increase.

Written and Gathered by Pars Bitumen