OPEC+ or “OPEC Plus” is an informal alliance of 23 oil-producing countries.
It was established in 2016 when the Organization of the Petroleum Exporting Countries (OPEC) agreed to cooperate with 10 other oil-producing countries, including Russia.
The goal of OPEC+ is to coordinate oil production and stabilize oil prices.
OPEC+ is a powerful force in the global oil market. Its decisions could have a significant impact on oil prices and the global economy.
What is OPEC+?
OPEC+ is an alliance of 23 oil-producing countries established to address challenges in the global oil market, such as oversupply and price volatility.
The influential group, made up of 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and 10 other oil-producing countries, meets regularly to discuss and agree on production adjustments to stabilize oil prices and maintain market balance.
Why was OPEC+ established?
The OPEC+ alliance was established in 2016 to respond to the sharp drop in oil prices caused by oversupply in the global market.
Since traditional OPEC efforts alone are not enough to solve the problem, OPEC members decided to seek support from non-OPEC countries to implement coordinated production cuts.
By promoting cooperation between OPEC and non-OPEC countries, the organization aims to create a more predictable and balanced oil market that benefits both producers and consumers.
Who are members of OPEC+?
OPEC’s 13 members include Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela.
The other 10 oil-producing countries that make up OPEC+ "+" are Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
Why is OPEC+ important?
Since its establishment, OPEC+ has played an important role in stabilizing the global oil market.
OPEC+’s primary goal is to stabilize global oil prices by balancing supply and demand in the oil market.
To achieve this goal, the organization coordinates production cuts among member countries to ensure that the market does not experience a glut or shortage of oil supply.
The group’s coordinated production cuts have helped alleviate the oversupply of oil, leading to a gradual recovery in oil prices.
In 2016, when oil prices were at lows, OPEC+ agreed to cut production. This helps boost oil prices and stabilize the market.
In 2020, when the COVID-19 pandemic caused a sharp drop in oil demand, OPEC+ agreed to further production cuts. This helps prevent oil prices from collapsing and keeps the market functioning.
Regular meetings and communications among OPEC+ members also help improve transparency and predictability in the oil market.
However, the effectiveness of OPEC+ may be affected by a variety of factors, such as geopolitical tensions, economic fluctuations and changing demand patterns.
The alliance faces challenges in maintaining production discipline among members, while external factors such as the COVID-19 pandemic further complicate the group's efforts to balance oil markets.
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