What is OPEC+?

Why in the News?

With Donald Trump potentially returning to the White House, OPEC+ delegates express concern over higher US oil production.
- His administration’s focus on deregulating the energy sector could lead to increased oil output, contributing to a further erosion of OPEC+’s market share.

What is OPEC+?

Formation and Purpose:

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.

Factors are influencing OPEC+’s oil production cuts

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.

Implications of OPEC+’s policies

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.

[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