A Study About OPEC and IEA

Running head: A STUDY ABOUT OPEC AND IEA
A study about OPEC and IEA
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1A STUDY ABOUT OPEC AND IEA
This report’s purpose is to critically appraise few differences as well as similarities
between OPEC and IEA including several objectives as well as similarities. Lastly, a SWOT
analysis of both of them.
OPEC stands for Organisation of the Petroleum Exporting Countries. It is a perpetual,
organization of intergovernmental. It was created at the conference of Baghdad conference on
10th-14th September, 1960 by the country namely Iraq, Kuwait, Iran, Saudi Arabia as well as
Venezuela. Its headquartered is situated at Vienna, Austria since the year of 1965 (Griffin and
Teece 2016).
IEA stands for International Energy Agency. It was founded in the year of 1974. It
helps all other countries so that they all can cooperatively give a response to oil supply
disruptions. Several criteria a country should have regarding the energy security in order to
join IEA. In recent times, IEA consists of 30 member countries along with 1 accession
country and 7 association countries. Dr. Fatih Birol, an executive director, is the head of the
management of IEA secretariat (Blok and Nieuwlaar 2016).
Objectives of OPEC
The objectives of OPEC are as follows: -
 To co-ordinate as well as merge the policies of petroleum of the member countries
 To find out the best means for the protection of their individual as well as collective
interests (Dike 2013).
 To seek out the ways as well as means in order to ensure the price stabilization in oil
markets internationally with a view to eliminate the fluctuations that is harmful and
unnecessary.

2A STUDY ABOUT OPEC AND IEA
Objectives of IEA
The IEA process encourages an organized participating in an assessment of integrated
environment.
Objectives of IEA are: -
 Bringing together the organizations and its people with generating an interest in IEA that
may not clash with the collaboration in history.
 Involving the policy makers for securing their support for the sake of the process along
with its crucial findings (Jensen 2017).
 Facilitating the interaction process based upon a methodology which is common, that is
fostering the dialogue in between policy and science
Differences as well as similarities between OPEC and IEA
The two well-known international organizations of energy namely OPEC and IEA
which sometimes can be signified as a double-sided coin. Two faces but both have different
kinds of appearances. Similarly both their backgrounds are different from each other as well
as both their objectives regarding the formation of the companies are often differing each
other. But apart from these things they both are in need of each other to carrying out their
businesses flawlessly. Their energy as well as interest, they are constantly harmonizing each
other. In simple words, OPEC is referred to as the seller of the crude oil and on the other
hand IEA is referred to as the buyer of the crude oil. OPEC is so dedicated to sell their stock
of crude oil with the higher price if possible, so that it can make an effort in optimization of
the revenues related to its member countries (Ghassan and AlHajhoj 2016). Keeping in mind
of the conflicting nature, IEA anticipates in buying the crude oil as lowest as possible in
terms of money from the available market, in order to minimize their production cost involve