What is OPEC - Full Form, History, Established, Membership, Organization & Roles of The OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is one of the most influential organizations in the global energy market. It brings together major oil producing countries with the shared goal of managing oil production and ensuring stable oil prices in the international market. OPEC’s core membership and organization are designed to promote cooperation among its member countries, with key decisions made through meetings of oil ministers and supported by a permanent secretariat. The history of OPEC dates back to 1960, when five countries, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, founded the organization in response to growing control of oil prices by foreign companies in the international energy market.

Over time, the group expanded as more oil producing nations such as the United Arab Emirates and Algeria joined. Today, OPEC countries mainly come from Asia (Middle East), Africa and South America and they collectively hold a large share of the world’s proven oil reserves. One of OPEC’s main roles is regulating OPEC oil production; by setting production targets, the organization aims to balance supply and demand in the global market. OPEC crude oil production has a major impact on international oil prices, influencing economies, industries, and consumers worldwide. Because of this, OPEC continues to play a very important role in shaping the global energy landscape.

What is OPEC?

OPEC stands for Organization of the Petroleum Exporting Countries. It is an intergovernmental body of 13 major oil producing nations that coordinates petroleum policies to stabilize oil markets, control supply and ensure fair returns for producers effectively. This influences global oil prices by adjusting production levels. The OPEC organization was founded in Baghdad conference in September1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. It manages a significant portion of the world's oil supply, with its headquarters in Vienna, Austria. Brazil has also officially approved its entry into OPEC+, aligning with major oil-exporting nations.

When was OPEC Established?

OPEC is a group of major oil producing nations that work together to make decisions about oil production and pricing in the world. It was first formed on September 14, 1960, at a meeting in Baghdad, Iraq, where five developing countries such as Iran, Iraq, Kuwait, Saudi Arabia and Venezuela agreed to create a permanent intergovernmental organization. The main reason they came together was that they wanted greater control over their own oil, stronger cooperation in marketing practices and a better share of the money made from selling oil, instead of leaving these decisions mostly to large foreign oil companies that dominated the market at that time.

OPEC Membership and Organization

The OPEC is an intergovernmental body of oil exporting nations, founded in 1960 by Iran, Iraq, aiming to coordinate petroleum policies for stable prices and supply. The organisation operates on one member one vote and includes countries like Algeria, Nigeria, UAE, Angola, along with other oil producing countries, managing significant global oil reserves and production. OPEC new member Brazil has also officially approved its entry into OPEC+, aligning with major oil-exporting nations. Let’s take a look at OPEC membership and organization details.

OPEC Membership

OPEC was created in 1960 by five countries such as Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Since then, more countries have joined and today its members include oil producing nations such as Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. The organization is open to any country that exports a large amount of oil and agrees with OPEC’s goals. All major decisions are made together, with every member needing to agree.

OPEC Organization

Establishment: Formed in Baghdad, Iraq, in 1960.Headquarters: Vienna, Austria (since 1965).

Primary Goal: To coordinate and unify petroleum policies of members, ensuring stable oil markets, efficient supply to consumers, steady income for producers, and fair returns for investors.

Decision Making: Operates on "one member, one vote," with decisions often requiring unanimity.

Roles of The OPEC in the Organisation

OPEC manages around 80% of the world's crude oil reserves. It influences global oil supply and prices through production adjustments, impacting economies globally. It also works with non-OPEC producers to stabilize the market, managing initiatives for energy security and investment.

History of OPEC

OPEC Organization of the Petroleum Exporting Countries was founded in Baghdad in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela to gain control over oil prices, which were being set by major international companies. The organization was initially focused on preventing unfair price cuts and securing authority over their resources. However, gradually OPEC gained significant power in the 1970s, which rapidly increased prices and strengthened its market influence. Let’s take a detailed look at the history of OPEC so far.

1960s: Formation & Sovereignty

The Organization of the Petroleum Exporting Countries (OPEC) was founded in 1960, when representatives from Iran, Iraq, Kuwait, Saudi Arabia and Venezuela met in Baghdad to respond to the falling oil prices due to foreign company’s interference. Their goal was to work together on oil policies, take control of their natural resources and secure fair and stable prices for all oil producing countries. The headquarters was first in Geneva from 1960 to 1965, then moved to Vienna, Austria, where it is still located today. Gradually, more countries joined such as Qatar, Libya, the United Arab Emirates, Algeria and Nigeria.

The 1970s: Power & Embargo

Organization of the Petroleum Exporting Countries OPEC members showed their independence by taking control of their own oil industries as they began gaining power. This became especially clear during the 1973 Yom Kippur War, when Arab OPEC countries placed an oil embargo on the United States and the United Kingdom. As a result, oil prices rose to four times their previous level and caused a global energy crisis. This increase in price highlighted how much political and economic influence OPEC had at the time.

The 1980s: Challenges & Market Shifts

As oil production increased outside OPEC, especially in places like Alaska and the North Sea, the world needed less oil from OPEC. This caused oil prices to fall. Saudi Arabia often acted as a swing producer by cutting its own oil production to help keep prices stable, but this put a heavy burden on the country over time. These challenges and market shifts created havoc for OPEC, and they found it harder to control oil prices. The problem got so much out of control that by 1988 it gave up its formal price controls completely.

Late 20th & 21st Centuries: Cooperation & New Dynamics

Oil prices became mostly controlled by supply and demand in the global market which started hindering the entire objective of OPEC as it could no longer control the oil market. In 2016, OPEC expanded its efforts by forming OPEC+, which included non-OPEC countries such as Russia and Algeria. This larger group worked together to manage oil production and help keep the market more stable, especially through agreements like the Declaration of Cooperation. Eventually, OPEC overcame the price fluctuations and regained power.

How many Countries are in OPEC?

OPEC currently has 12 member countries, such as Algeria, Brazil, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela with the objective of coordinating oil policies to stabilize international markets. OPEC has members from all major continents. From Africa, the organization has Algeria, Congo, Equatorial Guinea, Gabon, Libya, Nigeria. From Asia, it has Iran, Iraq, Kuwait, Saudi Arabia, United Arab Emirates and from South America it has Venezuela.

Organization of the Petroleum Exporting Countries (OPEC) Oil Production

OPEC (Organization of the Petroleum Exporting Countries) and its allies (OPEC+) collectively produce a significant portion of the world's oil, with recent reports showing December 2025 production around 42.83 million barrels per day (bpd), slightly down from November despite agreed increases, due to cuts in Russia, Kazakhstan, and Venezuela. OPEC oil production increases and decreases depending on decisions made by its members and fluctuations in the global market. Recently, OPEC+ has made modest increases in production to keep supply balanced. Overall production dipped slightly compared to November because of issues in Iran and Venezuela. These issues canceled the planned increases from other countries. Let’s take a look at OPEC oil production in detail.

1. Modest Increases

OPEC+ has been adding small amounts, around 137,000 barrels per day to their output goals monthly in late 2025 but paused further hikes for early 2026. By pausing the production, OPEC+ can monitor market conditions and adjust future increases more strategically.

2. Supply Management

The organization manages oil production to stabilize the international market, often adjusting output to prevent shortages using voluntary cuts or increases. This approach prevents huge fluctuations.

3. Recent Output

In January 2026, Reuters noticed that OPEC output fell in December 2025 due to shortage of supply from Iran and Venezuela. Despite efforts by some members such as Algeria, Iraq, Kuwait, Saudi Arabia, UAE to raise the supply quantity, OPEC’s output couldn’t match expectations.

What is the Price of Crude Oil: OPEC Crude Oil Production

Crude oil prices are trading around the following levels, with WTI around $59-$60 and Brent around $64 per barrel. Crude oil prices have been experiencing volatility, with a recent slight decline amid concerns about potential trade tensions. OPEC crude oil production fluctuates monthly based on agreements and market conditions, with recent figures showing levels around 30 million barrels per day for OPEC members and over 42 million bpd for the broader OPEC+ alliance in late 2025. Key producers like Saudi Arabia adjust production output, impacting overall supply. Let’s take a look at OPEC crude oil production.

1. Crude Oil Production of OPEC Members

Here is how many members in OPEC countries together produced around 30.07 million barrels per day in December 2025. This number shows only small changes, indicating a stable output. Most member countries maintained their production levels, while a few countries made slight adjustments. The Organization of the Petroleum Exporting Countries (OPEC) currently has 12 member countries, which coordinate oil policies to stabilize markets, including Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United United Arab Emirates, and Venezuela, with Angola having withdrawn in 2024.

2. Crude Oil Production of OPEC And Allies

OPEC+ (OPEC and allies like Russia, Kazakhstan) collectively controls significant global oil supply, influencing prices through coordinated production cuts or increases, with recent adjustments in late 2025/early 2026 focused on market stability, gradual output increases (like 137,000 bpd in Nov 2025), and addressing market share, alongside ongoing voluntary adjustments by key members. OPEC and its allied country’s total crude oil production reached about 42.83 million barrels per day in December 2025. This was slightly lower than in November, as some allies like Russia and Kazakhstan reduced their production output. The overall decrease highlights efforts to prevent oversupply in the global oil market.

3. Crude Oil Production Market Dynamics

Crude oil market dynamics are driven by the fundamental tension between shifting supply (led by non-OPEC+ growth and OPEC+ cuts) and evolving demand (influenced by global economy, EV adoption), creating periods of oversupply or tightness, with geopolitical flare-ups and technological shifts (like renewables) acting as key price catalysts, leading to volatile prices and changing market power dynamics. In late 2025, OPEC+ increased production to meet international market demand, but early 2026 plans suggest a pause in further hikes. The decision aims to avoid over supply and gives OPEC a chance to control the situation as current demand is close to total production.

Conclusion

OPEC is one of the most influential organizations in the global energy market. It brings together major oil producing countries with the shared goal of managing oil production and ensuring stable oil prices in the international market. It was founded by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela in 1960. Venezuela holds the world's highest oil reserves, totaling approximately 303 billion barrels as of 2025. While it leads in raw volume, its output remains low due to aging infrastructure and international sanctions.OPEC manages around 80% of the world's crude oil reserves. It influences global oil supply and prices through production adjustments. It also works with non-OPEC producers to stabilize the market, fostering initiatives for energy security and investment in the global oil market. In December 2025, OPEC countries together produced around 30.07 million barrels per day indicating a stable output.

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