OPEC+: Balancing Global Oil Supply and Market Stability

Why in the news?

Crude oil prices steadied after a rise in U.S. gasoline stockpiles and the postponement of an OPEC+ meeting, highlighting the alliance’s critical role in stabilizing global energy markets and influencing international economic trends.

OPEC+: Balancing Global Oil Supply and Market Stability

Overview of OPEC and OPEC+ :

  • OPEC+ is a coalition of 22 oil-exporting countries formed in 2016 to regulate global oil supply and stabilize market prices.
  • OPEC, established in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, is an intergovernmental organization with 12 current members, mainly from the Middle East and Africa.
  • Members include Algeria, Nigeria, and the UAE, while Angola withdrew in January 2024.
  • OPEC’s headquarters is located in Vienna, Austria.

Role of OPEC+ in the Global Oil Market:

  • OPEC+ combines OPEC members with non-OPEC countries like Russia, Kazakhstan, and Malaysia to coordinate oil production levels.
  • The alliance balances supply and demand, ensuring market stability and protecting the interests of oil producers.
  • By managing production cuts or increases, OPEC+ prevents extreme price fluctuations and influences global energy dynamics.

Recent Developments and Impact:

  • Crude oil prices recently steadied after an unexpected rise in US gasoline stockpiles and the postponement of an OPEC+ meeting on output policy.
  • The delay underscores the importance of OPEC+ decisions on global oil prices and economic stability.
  • As oil remains a primary energy source, OPEC+ continues to shape international energy policies and market trends, reaffirming its critical role in the global economy.

Sources Referred:

PIB, The Hindu, Indian Express, Hindustan Times