23 Facts About OPEC

Formation of OPEC marked a turning point toward national sovereignty over natural resources, and OPEC decisions have come to play a prominent role in the global oil market and international relations.

Since the 1980s, OPEC has had a limited impact on world oil supply and price stability, as there is frequent cheating by members on their commitments to one another, and as member commitments reflect what they would do even in the absence of OPEC.

Current OPEC members are Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela.

Coordination among oil-producing states within OPEC made it easier for them to nationalize oil production and structure oil prices in their favor without incurring punishment by Western governments and firms.

Organizational logic that underpins OPEC is that it is in the collective interest of its members to limit the world oil supply in order to reap higher prices.

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However, the main problem within OPEC is that it is individually rational for members to cheat on commitments and produce as much oil as possible.

Political scientist Jeff Colgan has argued that OPEC has since the 1980s largely failed to achieve its goals .

OPEC Conference is the supreme authority of the organization, and consists of delegations normally headed by the oil ministers of member countries.

At various times, OPEC members have displayed apparent anti-competitive cartel behavior through the organization's agreements about oil production and price levels.

OPEC has not been involved in any disputes related to the competition rules of the World Trade Organization, even though the objectives, actions, and principles of the two organizations diverge considerably.

OPEC often has difficulty agreeing on policy decisions because its member countries differ widely in their oil export capacities, production costs, reserves, geological features, population, economic development, budgetary situations, and political circumstances.

On 1 September 1965, OPEC moved to Vienna, Austria, after Switzerland declined to extend diplomatic privileges.

OPEC bargained with the dominant oil companies, but OPEC faced coordination problems among its members.

In 1971, an accord was signed between major oil companies and members of OPEC doing business in the Mediterranean Sea region, called the Tripoli Agreement.

One of the major fears for OPEC members was that nationalization would cause a steep decline in the price of oil.

OPEC action is really the first illustration and at the same time the most concrete and most spectacular illustration of the importance of raw material prices for our countries, the vital need for the producing countries to operate the levers of price control, and lastly, the great possibilities of a union of raw material producing countries.

OPEC was finally captured in 1994 and is serving life sentences for at least 16 other murders.

In light of all these market pressures, OPEC decided to set aside its ineffective production ceiling until the next ministerial conference in June 2016.

In early March 2020, OPEC officials presented an ultimatum to Russia to cut production by 1.

In July 2021, OPEC+ member United Arab Emirates rejected a Saudi proposed eight-month extension to oil output curbs which was in place due to COVID-19 and lower oil consumption.

In October 2022, key OPEC+ ministers agreed to oil production cuts of 2 million barrels per day, the first production cut since 2020.

Approval of a new member country requires agreement by three-quarters of OPEC's existing members, including all five of the founders.

Since 2007, OPEC has published the "World Oil Outlook" annually, in which it presents a comprehensive analysis of the global oil industry including medium- and long-term projections for supply and demand.