What is OPEC+?

• OPEC+ is a coalition of OPEC members and non-OPEC oil-producing nations that work together to manage oil production and stabilize global oil prices.
• The alliance was formed in 2016 in response to increasing oil production in the United States, particularly from shale oil, which led to falling oil prices.

OPEC Members:

• OPEC was founded in 1960 and includes 12 member countries:
  Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates (UAE), Venezuela.

Non-OPEC Members in OPEC+:

• OPEC+ includes 10 non-OPEC members:
  Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, Sudan.

Global Influence:

OPEC+ countries together produce approximately 40% of the world’s crude oil and control about 80% of the world’s proven oil reserves.

• Rising US oil production: The shale boom in the US has increased its market share, impacting OPEC+’s influence.
• Global price stability: OPEC+ implements production cuts to prevent oil prices from falling too low.
• Weak global demand: Extended cuts due to low demand, especially in major economies.

• Reduced market share: OPEC+’s global oil share dropped from 55% in 2016 to 48% in 2024.
• Price volatility: OPEC+’s production cuts aim to stabilize prices, but increasing US production affects this goal.
• Economic stability: Production cuts help sustain favorable prices for oil-producing economies.

PYQ:

[2009] Other than Venezuela, which one among the following from South America is a member of OPEC?

(a) Argentina
(b) Bolivia
(c) Ecuador
(d) Brazil