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OPEC
In this section we take a look at the influence of OPEC and its effect on fuel pricing.
One of the most significant influences on the price of crude is the Organisation of Petroleum Exporting Countries (OPEC) that was established in 1960 to co-ordinate prices and supply policies of the major oil producing states. OPEC countries include Algeria, Gabon, Indonesia, Iran, Iraq, Libya, Nigeria, Qatar, Saudi Arabia and Venezuela. Together these countries have more than 75 percent of the world’s proven oil reserves and currently account for around 40 percent of crude production. Non OPEC countries with proven reserves include the US (2.9 percent), the former Soviet Union (5.5 percent) and the UK (0.4 percent).
Shell only produces 2.5% of the world’s total oil supply and therefore has limited influence on the crude market. When investing billions of dollars in the complex, high risk, long-term projects now necessary to find and produce oil, Shell has to take into account the wide variations in the price of crude. Developing one new oil field can cost in excess of US$1 billion.
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Factors that drive fuel prices
Demand
OPEC
Refining capacity
Taxes
Operating costs
Shell's commitment
