What is OPEC+?

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What is OPEC+? Blog Image

Overview:

OPEC+ members led by Saudi Arabia and Russia recently agreed to extend voluntary oil output cuts first announced in 2023 as part of an agreement among oil producers to boost prices following economic uncertainty.

About OPEC+

  • It is a group of oil-exporting countries which meets regularly to decide how much crude oil to sell on the world market.
  • Origin: These nations came to an accord towards the end of 2016 “to institutionalize a framework for cooperation between OPEC and non-OPEC producing countries on a regular and sustainable basis.”
  • These nations aim to work together on adjusting crude oil production to bring stability to the oil market.
  • OPEC+ controls about 40% of global oil supplies and more than 80% of proven oil reserves. 
  • At the core of this group are the members of OPEC (the Organization of the Oil Exporting Countries), which are mainly Middle Eastern and African countries.
  • Members: It comprises OPEC countries plus Azerbaijan, Bahrain, Brunei, Kazakhstan, Russia, Mexico, Malaysia, South Sudan, Sudan, and Oman.

What is the Organization of the Petroleum Exporting Countries (OPEC)?

  • It is a permanent intergovernmental organization of oil-exporting countries.
  • Mission:
    • To coordinate and unify the petroleum policies of its member countries.
    • Ensure the stabilization of oil prices in the international oil markets, with a view to eliminating harmful and unnecessary fluctuations.
  • Formation: It was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries, namely the Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
  • Currently, it has 12 members, including Algeria, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, and the United Arab Emirates.
  • Headquarters: Vienna, Austria.

Q1) What is Crude Oil?

Crude oil is a naturally occurring liquid petroleum product composed of hydrocarbon deposits and other organic materials formed from the remains of animals and plants that lived millions of years ago. These organisms were covered by layers of sand, silt, and rock, subject to heat and pressure, and eventually turned into a type of fossil fuel that is refined into usable products, including gasoline, diesel, liquefied petroleum gases, and feedstock for the petrochemical industry.

Source: Several OPEC+ nations extend oil cuts to boost prices