The Organization of the Petroleum Exporting Countries (OPEC) was created at the Baghdad Conference, September 9-14 of 1960. The organization was formed by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. These were the founding members. The group has since grown to thirteen members. There are also three countries that have applied to OPEC since the thirteenth member was inducted, but they have not been accepted. The five founding members have a veto power over the addition to new members. Besides this veto OPEC is set up so that all of the countries are equal members. In order to become a member of OPEC a country must be a "substantial net exporter" of petroleum and its interests in the industry are "fundamentally similar" to that of the members. In order to become a member they need to be approved by three fourths of the full members and all of the founding members, because of their veto power.

During the Baghdad conference the five leading oil-exporting countries decided that the price of oil was get too low. The main reason OPEC was formed was to insure that the prices of oil stayed consistent and did not continue to be reduced by the oil companie

The countries in OPEC have their own economic and political goals. Economically they want what most countries want, economic growth, low unemployment, price stability, and a balance of trade. The third goal, price stability is what brings the OPEC members together, because these countries are all sovereign they must agree that some of their individual goals can be accomplished by cooperating with each other. In OPEC countries oil is seen as capital and they use there capital to acquire financial assets. This is done because the countries realize that the oil will not be in their country forever. So they use the oil to get useful resources and financial assets so in the future the economy will flourish.

In January of 1961 a second meeting of OPEC took place. At this meeting the structure of the organization was set up. There is a Secretariat, a Board of Governors, and the Conference. The head of the Board of Governors is the secretary general. The Conference was setup to be the main authority in OPEC. The Board of Governors was responsible for carrying out the decision made by the Conference. In the years following the Caracas meeting the Secretariat went through some changes. It was split into different departments: Technical, Administrative, Public Relations and Enforcement. The Economics department was added in 1964. In 1965 the structure of the organization was changed. It was decided that the secretary general would be an elected position separate from the Board of Governors.

" that members shall demand that the oil companies maintain their prices steady and free from all unnecessary fluctuations; that members shall endeavor, by all means available to them, to restore present prices to the levels prevailing before the reduction. That t

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Approximate Pages = 5 (250 words per page double spaced)