Organisation of the Petroleum Exporting Countries (OPEC)

Context

The United Arab Emirates’ reported decision to leave OPEC and OPEC+ signals a notable change in global energy coordination, with potential implications for oil supply stability and pricing amid rising geopolitical tensions and shifting Gulf economic priorities.

About Organisation of the Petroleum Exporting Countries (OPEC)

1. OPEC is a permanent intergovernmental body that brings together major oil-producing nations to coordinate petroleum policies.
2. It was created in 1960 at Baghdad by five founding countries—Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela—with the aim of influencing global oil supply decisions collectively.
3. Headquartered in Vienna, Austria, OPEC functions through regular meetings where members coordinate production targets and policy decisions.
4. The organisation seeks to stabilise global oil markets, ensuring fair returns for producers while maintaining steady and reliable oil supply for consumers.
5. At present, OPEC has around 12 member countries, including nations such as Algeria, Nigeria, Libya, Congo, Gabon, Equatorial Guinea, and the UAE (which is set to exit in in 2026), while Angola left in 2024.
6. The organisation accounts for roughly 35–40% of global crude oil production., giving the group significant influence over the energy market.
7. They also account for roughly one-third to two-fifths of global crude oil production, depending on market conditions and output agreements.
8. One of OPEC’s key roles is to influence global oil prices by adjusting production levels among member countries to balance supply and demand.

OPEC+

1. OPEC+ is a broader grouping formed in 2016 as an extension of the Organization of the Petroleum Exporting Countries (OPEC).
2. It brings together 22 oil-producing countries that coordinate their crude oil output to influence global supply levels.
3. The group includes the 12 OPEC members along with non-OPEC producers such as Russia, Kazakhstan, Mexico, Oman, Azerbaijan, Bahrain, Brunei, Malaysia, South Sudan, and Sudan.
4. Member countries collaborate by regularly meeting to decide how much oil should be produced and supplied to the global market.
5. The primary goal of OPEC+ is to stabilise the international oil market by balancing production with demand conditions.