Why in news?
At its recent ministerial meeting the alliance of oil‑exporting countries known as OPEC+ decided to extend voluntary production cuts into the second half of 2026 to balance the global oil market. The decision, taken in April 2026, reinforces the group’s influence over crude prices amid uncertain demand from major consuming economies.
Background
The Organization of the Petroleum Exporting Countries (OPEC) is a permanent inter‑governmental organisation founded in Baghdad in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its mission is to coordinate and unify petroleum policies among member states in order to stabilise oil markets, secure steady income for producers and ensure a regular supply for consumers. OPEC’s headquarters are in Vienna, Austria. Over the years the organisation has grown to include Algeria, Equatorial Guinea, Gabon, Libya, Nigeria, the Republic of the Congo and the United Arab Emirates, while Angola withdrew in 2024. In 2016 OPEC joined with ten other oil‑producing nations—including Russia, Azerbaijan, Kazakhstan, Bahrain, Brunei, Malaysia, Mexico, Oman, South Sudan and Sudan—to form OPEC+. Together, the OPEC+ countries account for roughly 41 percent of global crude oil production and possess about 80 percent of the world’s proven reserves. Their coordinated output targets have a significant impact on international oil prices.
Key points
- Membership: OPEC currently comprises twelve countries in the Middle East and Africa, while the OPEC+ framework adds ten non‑OPEC producers led by Russia.
- Purpose: The alliance aims to manage supply to avoid sharp price swings that could destabilise producers and consumers. Members adjust output quotas collectively rather than competing individually.
- Decision‑making: Production decisions are often shaped by the interests of Saudi Arabia (the largest OPEC producer) and Russia (the largest non‑OPEC producer). Meetings are held regularly to review market conditions.
- Criticism and challenges: OPEC+ is sometimes described as a cartel because it seeks to influence prices, and its cohesion is tested by differing national interests, the growth of shale oil production and the global shift toward renewable energy.
Conclusion
OPEC+ remains a powerful actor in the global energy landscape. By coordinating supply cuts and increases, the group seeks to maintain price stability, though its ability to control markets is challenged by alternative fuels and rising non‑OPEC production.
Source: U.S. Energy Information Administration · CMDportal · Investopedia
