OPEC
About
- The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental body comprising 12 oil-exporting developing nations.
- Established during the Baghdad Conference in 1960, its primary mandate is to coordinate petroleum policies and provide technical/economic assistance to its members.
- Founding Members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
- Other Current Members: UAE, Libya, Algeria, Nigeria, Congo, Equatorial Guinea, and Gabon.
- It operates as a cartel, influencing global oil prices by regulating production levels (increasing production to lower prices and cutting production to raise them).
- Headquarters: Located in Vienna, Austria (notably, Austria is not a member).
“OPEC Plus” Alliance
- The 2014 oil crisis, triggered by a massive oversupply that sent prices crashing below $30 per barrel, led to a strategic shift in global energy politics. To regain control over market stability, OPEC began collaborating with several non-OPEC producers.
- Partners: Includes Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan.
- This broader alliance, known as OPEC Plus, coordinates production cuts to prevent price collapses and manage the global supply-demand balance.
- Together, the OPEC Plus nations account for approximately 40% of the world’s crude oil production, giving them significant leverage over the global economy.