The Organization of the Petroleum Exporting Countries, or OPEC as it is commonly known, is an intergovernmental organization made up of thirteen oil-producing countries which were estimated in 2018 to supply approximately 44% of the world’s oil and possess more than 81.5% of the world’s oil reserves. Through its policies, OPEC aims to maintain stability in the global petroleum market, provide a reliable supply of oil to consumers, and manage prices to maintain a steady income for the oil producers and a fair return for investors.
OPEC was originally formed in 1960 in Baghdad by five founding members: Iran, Iraq, Kuwait, Saudi Arabia (OPEC's de facto leader), and Venezuela. The organization's purpose was to coordinate the actions of its member states in order to stabilize the petroleum production pipeline and reclaim control of global oil prices from large corporations such as Standard Oil of New York, Gulf Oil, and Texaco (ancestors of modern oil companies such as Chevron, BP, ExxonMobil, and Shell). OPEC's original headquarters were located in Geneva, Switzerland, but were moved in 1965 to Vienna, Austria. As of 2022, OPEC has 13 member countries. Seven are located in Africa, five in the Middle East, and one in South America.
OPEC member countries 2022:
|Angola||Republic of the Congo||Saudi Arabia|
|Equatorial Guinea||Iran||United Arab Emirates|
Former OPEC members
Although rare, there have been instances of countries suspending or terminating their membership in OPEC. The reasons behind these departures tend to relate to production quotas, in which OPEC's member states agree to limit or boost their oil production to agreed-upon amounts in order to leverage supply and demand and thereby control oil prices. Ecuador felt the membership fees were too high and the production quotas were too restrictive. Gabon voiced similar concerns during its hiatus from OPEC, though it later returned to the organization. Indonesia, on the other hand, departed initially because it could not produce enough oil to meet its quota, then rejoined, but left again because the quota had become too limiting. Qatar is said to have left because its energy sector was transitioning to focus upon natural gas rather than oil—though analysts also point to friction between Qatar and other OPEC members, particularly the organization's informal leader, Saudi Arabia.
- Ecuador — Suspended its membership in December 1992, reactivated in October 2007, withdrew again on 01 January 2020
- Indonesia — Suspended its membership in Jan. 2009, reactivated Jan. 2016, suspended again 30 Nov. 2016
- Gabon (current member) — Terminated its membership Jan. 1995, rejoined July 2016
- Qatar — Terminated its membership 01 January 2019
Criticisms of OPEC's actions
Individual OPEC members are occasionally criticized for acting antagonistically toward one another rather than cooperating—most notably with Iraq's military invasion of fellow OPEC member Kuwait in 1990—and member states are known to often disagree on production quotas. The actions of the organization as a whole have also drawn criticism at times.
One of OPEC's most controversial actions took place in 2022 during the Russo-Ukrainian war. Many countries around the world had boycotted Russian oil in protest over the country's invasion of Ukraine, causing analysts to predict a global shortage of non-Russian oil. Despite these projections, OPEC chose to reduce production instead of increasing it. This move was seen by some as a craven effort to raise oil prices and by others as a clear attempt to force countries to remove their embargoes and purchase Russian oil, thereby assisting Russia's effort to fund the war. OPEC has adamantly maintained that politics do not factor into its decision-making.
OPEC+ and the future of OPEC
In recent years, OPEC has begun making agreements with not just its own member states, but with a group of 10-11 non-OPEC oil-producing countries including Russia, which wields strong political power within the group. This unofficial coalition is typically referred to as OPEC+ by writers and analysts, and even by OPEC members themselves.
OPEC+ member countries (excluding existing OPEC members):
|Kazakhstan||Philippines (some instances)|