The acronym OPEC stands for the Organization of Petroleum Exporting Countries, a group formed in September 1960. OPEC was established when Iran, Iraq, Venezuela, Saudi Arabia and Kuwait came together and signed an agreement at the Baghdad Conference.
These five countries were the founding members of OPEC. As of 2014, the organization has 12 member countries, including Ecuador, Libya, Qatar, Nigeria and Algeria.
The main reason for the formation of OPEC was so that these countries could coordinate and manage the oil supply as a means to regulate oil prices. As of 2014, the members of OPEC collectively account for nearly 75 percent of the world's oil reserves, according to CNN.