Inside the Oil Alliance: OPEC vs. OPEC+

What ties diesel, gasoline, and lubricants together? They all are sourced from crude oil—a commodity in the global energy market. Maintaining market balance and stable pricing is crucial in the energy landscape, as consumers around the world depend on its consistent availability. The Organization of the Petroleum Exporting Countries (OPEC) was founded in 1960 and is an intergovernmental organization that coordinates oil production policies among member nations to help regulate global oil supply and stabilize prices. In 2016, OPEC partnered with 10 additional oil-producing nations, forming what is now known as OPEC+. In today’s article, we’ll explore the key similarities and differences between them, as well as the roles each plays in the oil and gas industry.

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Its official mission is to “coordinate and unify the petroleum policies” of its member nations to ensure fair pricing for producers, reliable supply for consumers, and a reasonable return on investment. However, the organization is most widely recognized for its influence on global crude oil prices. As of March, this year, it is comprised of 12 member countries including Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela. Together, these nations hold a major portion of the world’s crude oil reserves and contribute at large to global oil production.

Since its inception, OPEC has maintained a leading role in the global oil market by adjusting its members’ oil production levels to influence oil prices and maintain oil and gas market stability. OPEC accounts for roughly 40% of global crude oil production and works in coordination with its member countries to adjust output as needed, aiming to balance supply and demand dynamics. The organization’s headquarters are in Vienna, Austria, where regular meetings are conducted to assess the global oil market and make policy decisions. Through these coordinated efforts, it seeks to mitigate harmful price fluctuations and promote a more stable economic environment for both producers and consumers in the energy sector.

OPEC+ refers to the Organization of the Petroleum Exporting Countries plus additional major oil-producing nations, forming a strategic alliance. It builds upon the original OPEC framework by including primary non-OPEC producers. Established in 2016, the group consists of 12 OPEC members—such as Saudi Arabia, Iraq, and the UAE—alongside 10 non-OPEC countries, including Russia, Mexico, and Kazakhstan. The alliance was created to enhance global cooperation in managing oil supply and stabilizing prices. It controls over 80% of the world’s proven oil reserves and accounts for approximately 41% of global oil production, granting it significant influence over market conditions.

The primary goal of the organization is to regulate crude oil supply and maintain stability in the global market. Leading producers like Saudi Arabia and Russia to be instrumental in shaping the group’s policy decisions. By collectively agreeing on production targets, member countries can increase or reduce output to respond to shifts in global demand and other market dynamics. With its broad membership and substantial market share, it has become a central force in the global energy landscape, capable of influencing market trends through coordinated action.

Market Influence

Although both stem from the same overarching organization and both influence the global oil market, they serve different purposes. Their impact on the crude oil market can be understood in the following ways:

1. Scope of influence: OPEC+ has a broader reach, encompassing both producers, allowing for greater control over global oil production.
2. Formation timeline: OPEC has a longer history, while OPEC+ is a more recent alliance formed to address changing market dynamics.
3. Decision-making: OPEC+ decisions involve a larger group of countries, potentially leading to more complex negotiations and agreements.
4. Market share: OPEC+ has a larger market share, giving it a more significant influence over global oil prices and supply.
5. Production strategies: OPEC+ has implemented coordinated production cuts to stabilize the market, as seen in 2024 when the alliance reduced output by 1.66 million barrels per day.

While OPEC focuses on aligning production policies among its member nations, OPEC+ extends this collaboration to include non-OPEC producers—allowing for broader control of the global oil market and improved price stability.