Factors in this category are primarily related to the natural environment

OPEC is an international organization of eleven developing countries which are heavily reliant on oil revenues as their main source of income. Membership is open to any country which is a substantial net exporter of oil and which shares the ideals of the Organization. The current Members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Since oil revenues are so vital for the economic development of these nations, they aim to bring stability and harmony to the oil market by adjusting their oil output to help ensure a balance between supply and demand. Twice a year, or more frequently if required, the Oil and Energy Ministers of the OPEC Members meet to decide on the Organization's output level, and consider whether any action to adjust output is necessary in the light of recent and anticipated oil market developments.

In the short term, world demand for oil is virtually proportionate to economic growth and shows very little price elasticity. Oil is in fact mainly used for transportation purposes and there are very few substitutes for it. The world oil supply can broadly speaking be divided between OPEC, which has a market share of approximately 40%, and the non-OPEC countries. The latter produce at full capacity (barring exceptional circumstances). OPEC thus behaves as the "swing producer", which seeksto adjust the global supply of oil in relation to global demand by adjusting its own quotas.