The Organization of the Petroleum Exporting Countries (OPEC) is a permanent intergovernmental organization and a cartel of oil-exporting developing nations. It was founded on September 14, 1960, at the Baghdad Conference by five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The organization's creation was a direct response to the dominance of Western oil companies, known as the "Seven Sisters," which controlled Middle Eastern oil resources and kept prices low, limiting the benefits for the oil-producing nations. OPEC's stated objective is to coordinate and unify the petroleum policies of its member countries to secure fair and stable prices for producers, ensure an efficient and regular supply of petroleum to consuming nations, and provide a fair return on capital for investors.
OPEC's primary mechanism for influencing the global oil market is through the collective adjustment of crude oil production levels, often referred to as production quotas. These adjustments are decided through ministerial negotiations, which historically required the unanimous consent of all member states. The organization's headquarters have been located in Vienna, Austria, since 1965.
A key related concept is OPEC+, an alliance formed in late 2016 that includes the OPEC members and ten non-OPEC oil-producing countries, most notably Russia. This broader group, which controls over 45% of the world's oil supply, was established to better control the global crude oil market and help rebalance it.
Recently, the alliance has seen significant changes, including the announced departure of the United Arab Emirates (UAE), effective May 1, 2026, after nearly six decades of membership. The UAE's decision was driven by a desire for a more flexible production strategy, free from the collective decision-making and production quotas, to maximize revenue before the anticipated peak of fossil fuel demand. Other members, such as Angola, also withdrew in 2024 due to disputes over production targets. Despite these exits, the core mechanism of collective production adjustment remains the central tool for the remaining members of the OPEC+ alliance.