Here are key facts about OPEC+ and its role:
What are OPEC and OPEC+?
Iraq, Iran, Kuwait, Saudi Arabia and Venezuela founded OPEC in 1960 in Baghdad with the aim of coordinating oil policies and ensuring fair and stable prices. The group now has 13 countries, mostly from the Middle East and Africa, and produces about 30 percent of the world's oil.
OPEC formed the so-called OPEC+ alliance with ten of the world's largest non-OPEC oil exporters, including Russia, at the end of 2016.
OPEC+ production accounts for about 40 percent of global oil production and the alliance's main goal is to regulate oil supplies to the global market. It is led by Saudi Arabia and Russia and each produces about nine million and 9.5 million barrels per day, respectively.
How does OPEC affect global oil prices?
OPEC members' exports account for about 60 percent of global oil trade. In 2021, OPEC estimated that its members held more than 80 percent of the world's proven oil reserves.
Given its large market share, OPEC's decisions could affect global oil prices. Its members meet regularly to determine how much oil will be sold on world markets.
As a result, oil prices tend to rise when those countries decide to cut supplies as demand declines, while prices tend to fall when the group decides to pump more oil into the market.
At the last OPEC+ meeting in June, Saudi Arabia pledged to cut its output by one million barrels per day (bpd) in July, the largest in a more comprehensive cut in the OPEC+ alliance to restrict supply until 2024 as the alliance seeks to boost falling oil prices.
Saudi Arabia has since extended its further voluntary cuts until the end of this year.
Oil prices fell on Nov. 16 about five percent to a four-month low amid concerns about economic growth. It then recovered thanks to expectations that OPEC+ will take measures to support prices.
However, prices have largely ignored rising tensions in the Middle East.
How do OPEC's decisions affect the global economy?
Some decisions to cut production have had significant effects on the global economy. During the 1973 Yom Kippur War, Arab members of OPEC imposed an embargo on oil shipments to the United States in response to its decision to resupply the Israeli army, including other countries that supported Israel. The organization also announced production cuts.
The embargo has put pressure on the U.S. economy, which was already struggling and dependent on imported oil. Oil prices jumped, causing higher fuel costs for consumers and fuel shortages in the United States. The ban has also pushed the United States and other countries to the brink of a global recession.
During pandemic-related lockdowns around the world in 2020, crude oil prices fell. As a result, OPEC+ cut oil production by about 10 million barrels per day, equivalent to about 10 percent of global production, in an effort to support prices.
What are OPEC member countries?
The current OPEC members are: Saudi Arabia, UAE, Kuwait, Iraq, Iran, Algeria, Angola, Libya, Nigeria, Congo, Equatorial Guinea, Gabon and Venezuela.
Non-OPEC member countries are Russia, Azerbaijan, Kazakhstan, Bahrain, Brunei, Malaysia, Mexico, Oman, South Sudan and Sudan.