The OPEC basket oil price
The OPEC crude oil price is defined by the price of the so-called OPEC (Reference) Basket. This basket is an average of the prices of petroleum blends that are produced by the OPEC members. Some of these oil blends are, for example: Saharan Blend from Algeria, Basra Light from Iraq, Arab Light from Saudi Arabia, Girassol from Angola, Es Sider from Libya, etc. OPEC tries to keep the price between given maxima and minima by increasing and decreasing its oil production. The OPEC reference basket includes both heavy and light crude oils, and is heavier than most other crude oil mixtures (benchmarks).
The OPEC Basket is one of the most crucial benchmarks for crude oil prices worldwide. The most significant benchmarks are UK Brent, West Texas Intermediate (WTI), and Dubai Crude (Fateh). Because there are many types and grades of oil, such benchmarks are indispensable for referencing them on the global oil market. Looking at the OPEC price within the last 12 months, the highest peak was reached in February 2017, when the annual average price stood at 53.37 U.S. dollars per barrel, while the lowest price was 34.54 U.S. dollars per barrel in March 2016.
OPEC stands for “Organization of the Petroleum Exporting Countries,” and was founded in 1960 in Baghdad, Iraq. The following countries are members of this organization: Algeria, Angola, Ecuador, Gabon, Iraq, Iran, Qatar, Kuwait, Libya, Nigeria, Saudi Arabia, Venezuela, and the United Arab Emirates. The main aim of OPEC is to coordinate the oil policies of these countries, and thus to have more influence on the international oil market.