News: OPEC+ agreed in principle to maintain steady oil output despite falling prices, internal tensions, and widening geopolitical uncertainty among key members.
About OPEC+
- OPEC+ is a grouping of 22 oil-exporting countries that meets regularly to decide crude oil production levels to stabilise the global oil market.
- Genesis of OPEC+: OPEC+ was formed in 2016 in response to falling oil prices caused by oversupply, largely due to rapid growth in U.S. shale oil production, which weakened OPEC’s market control.
- Members: OPEC+ includes the 12 OPEC members and 10 non-OPEC producers such as Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.
- Nature of OPEC+: OPEC+ operates through a Declaration of Cooperation, which provides a framework for voluntary dialogue and coordination on oil production rather than a formal treaty-based structure.
- Functions
- OPEC+ works to adjust crude oil production levels collectively to bring stability to the global oil market.
- The group regulates oil supply to manage price volatility and market balance.
- Significance
- OPEC+ crude output represents about 41% of global oil production.
- OPEC and OPEC+ countries together produce about 60% of global oil output, giving them strong influence over oil markets.
About OPEC
- Established: OPEC was founded in 1960 at the Baghdad Conference by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
- Aim: OPEC coordinates petroleum policies to ensure stable oil prices, steady supply to consumers, and fair returns for investors.
- Members: OPEC currently has 12 members, mainly from the Middle East and Africa, after Angola withdrew in January 2024.
- Headquarters: OPEC is headquartered in Vienna, Austria.
