The Oil and gas field isalways divided into Upstream and downstream sector. The upstream sectorincludes the process of extracting the oil and gas . as the power of supplieris the main topic in this part of research all the focus will be on theupstream sector. The graph below represents the stages of processing the crudeoil and Gas. Supplier and the bargainingPower:The bargaining power of supplier means to which extentthe suppliers have impact on influencing the market prices of oil and gas, by determiningand controlling the amount of supplied oil and gas to the market.A very strong bargaining power requires a well organizedmarket without having many substitutes, as long as The current market does notfind a suitable alternatives or substitutes for oil and gas, this gives thesuppliers of Oil and gas or which called ( the producing Oil and gas countries)a greater bargaining power. As the oil and gas producing counties are mentioned here, it is a must to clarify what the OPECis.
OPEC (Organization ofthe Petroleum Exporting Countries) establishedin 1960 in Baghdad , The OPEC has 15 members ( those countries are the majorproducing oil country worldwide six in middle east countries:, seven in Africaand two in America ) which counted for 44 percent of global Oil production and 73percent of the worlds proven oil reserves according to US International EnergyStatistic .Frankly speakingthe demand usually does not change, but the supply is fluctuating based on theamount specified by OPEC. This is could be noticed when the OPEC announces ameeting to specify the supply amount forthe next period or month, after sometimes before the meeting or prices arestarting to fluctuate. To conclude, OPECpossess a significant bargaining power in the oil and Gas industry, byinfluencing the amount of supply to the market which directly affects theprices of the Oil and the Gas to the end costumers. Another important factorwhich not always easy to predict, but highly influences the Prices and thesupply of the oil is the politics, this was witnessed through the last years(such as wars, changes in thegovernmental politics strategy).