Why in news?
The coalition of oil‑producing countries known as OPEC + held a ministerial meeting in early January 2026 and decided to maintain its production targets despite volatility in world markets. Oversupply pressures from increased output in 2025 and geopolitical tensions within the group have made the decision noteworthy.
Background
The Organization of the Petroleum Exporting Countries (OPEC) was created in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to coordinate petroleum policies and secure fair returns for member states. Today OPEC has 13 members that collectively produce about 40 percent of the world’s crude oil. In 2016, facing low oil prices triggered by surging U.S. shale production, OPEC forged an alliance with ten non‑OPEC producers including Russia, Kazakhstan, Oman, Azerbaijan and Mexico. This expanded group became known as OPEC +. By synchronising production cuts or increases, OPEC + seeks to influence global oil prices and maintain market stability.
Membership and structure
- OPEC members: Current members include Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela.
- Non‑OPEC partners: The OPEC + alliance brings in Russia, Kazakhstan, Azerbaijan, Mexico, Bahrain, Malaysia, Sudan, South Sudan, Brunei and Oman. Together, OPEC + accounts for roughly 59 percent of global oil production.
- Decision‑making: Production quotas are negotiated at regular meetings, and compliance is monitored. Saudi Arabia and Russia, the largest producers in the group, often drive decisions.
Current dynamics
- Steady production: Throughout 2025 the alliance raised output by about 2.9 million barrels per day to meet post‑pandemic demand. However, fears of oversupply and weakening prices prompted a decision to pause further increases.
- Geopolitical tensions: Relations within the group have been strained by disputes between Saudi Arabia and the United Arab Emirates over market share, as well as wider sanctions on Russia and Iran. These tensions complicate consensus on production targets.
- Market outlook: Global oil demand faces headwinds from a possible economic slowdown and the transition to clean energy. OPEC + aims to support prices without triggering a supply glut that could hurt its members’ revenues.
Significance
- Price stabilisation: Coordinated output adjustments help prevent extreme price swings, which can disrupt economies worldwide. Consumers and producers alike benefit from predictable oil prices.
- Revenue dependence: Many OPEC members rely heavily on oil exports to fund public spending. Production decisions directly affect their budgets and social programmes.
- Energy transition: As renewable energy and electric vehicles gain ground, OPEC + faces the challenge of balancing near‑term revenue needs with long‑term shifts away from fossil fuels.
Conclusion
OPEC + remains a pivotal actor in global energy markets. Its ability to manage internal disagreements and respond to external pressures will determine how effectively it can steer oil prices during the energy transition. For consumers, stable and moderate oil prices offer a cushion against inflation, while producers must diversify their economies to prepare for a decarbonised future.
Source: News On Air
