What is OPEC and what does it do?

OPEC (Organization of the Petroleum Exporting Countries) is an intergovernmental organisation of 13 major oil-exporting nations founded in Baghdad in 1960. Its primary purpose is to coordinate petroleum production policies among member countries to stabilise oil markets and secure a steady income for producers. It does this by setting collective production quotas at biannual ministerial meetings. OPEC members collectively control approximately 40% of global crude oil production and over 80% of proven oil reserves. The organisation is headquartered in Vienna, Austria.

What is OPEC+ and how is it different from OPEC?

OPEC+ is an informal coalition of OPEC's 13 members plus 10 non-OPEC oil-producing countries that agreed to coordinate production from December 2016. The most significant addition is Russia, which was not historically an OPEC member. OPEC+ controls approximately 55% of global oil production collectively. OPEC+ meetings are separate from formal OPEC ministerial meetings and set 'additional voluntary cuts' on top of OPEC baseline quotas. Since 2022, OPEC+ coordination has been complicated by Russia's changed political status due to its Ukraine invasion.

How do OPEC production cuts affect petrol prices?

OPEC production cuts reduce the global supply of crude oil. With demand relatively inelastic in the short term (drivers cannot quickly switch to alternatives), reduced supply pushes crude prices higher. Higher crude prices increase the wholesale cost of refined products (petrol, diesel), which feeds through to pump prices in 2–6 weeks via the refinery, wholesale, and retail chain. A $10/barrel increase in Brent crude caused by OPEC+ cuts translates to approximately 6–8 cents per litre at European pumps and 2–3 cents per litre in the US, with a lag. The pump price impact is dampened in high-tax markets because the large fixed excise component cushions the percentage change.

OPEC (Organization of the Petroleum Exporting Countries)

The cartel of 13 major oil exporters that coordinates production to manage global oil prices — and its expanded OPEC+ coalition including Russia.

Definition

OPEC (Organization of the Petroleum Exporting Countries) is an intergovernmental organisation founded in Baghdad on 14 September 1960 by five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. It now has 13 member countries and is headquartered in Vienna, Austria.

OPEC's stated objective is to coordinate petroleum policies among member countries to stabilise oil markets, ensure fair and stable prices for producers, and provide a reliable supply to consumers. In practice, this primarily means setting collective oil production quotas at biannual Ministerial Conferences.

OPEC members (2026)

Country	Region	Approx. production (mb/d)	Proven reserves (billion bbl)
Saudi Arabia	Middle East	~9.0–10.0	~267
Iraq	Middle East	~4.2–4.5	~145
UAE	Middle East	~3.3–3.7	~97
Kuwait	Middle East	~2.5–2.7	~102
Iran	Middle East	~3.2–3.5 (sanctions-affected)	~209
Libya	Africa	~1.1–1.3 (conflict-variable)	~48
Algeria	Africa	~0.9–1.0	~12
Nigeria	Africa	~1.3–1.5 (under-quota)	~37
Gabon	Africa	~0.2	~2
Congo (Republic)	Africa	~0.2	~3
Equatorial Guinea	Africa	~0.1	~1
Venezuela	South America	~0.7–0.9	~303 (technically world's largest)
Ecuador (readmitted 2024)	South America	~0.5	~8

Saudi Arabia is the dominant member — the only country with significant spare production capacity (~2–3 mb/d) that it can deploy to stabilise prices in either direction. For the spare capacity concept, see our spare capacity glossary entry.

OPEC+ : the expanded coalition

Since December 2016, OPEC has cooperated with 10 non-OPEC producers in the "OPEC+" framework. The most significant additions:

OPEC+ non-OPEC member	Production (mb/d)	Significance
Russia	~9–10	Second-largest producer; pivotal to coalition arithmetic
Kazakhstan	~1.8–2.0	Frequently overproduces quota due to Kashagan field pressure
Azerbaijan	~0.6	Committed cutter; South Caucasus perspective
Mexico	~1.7	Participated in 2020 cuts but less active coordinator
Oman	~0.9	Gulf state; supports Saudi-led coordination
Malaysia	~0.6	SE Asia representation

Russia's relationship with OPEC+ has been complicated since its February 2022 Ukraine invasion. Western sanctions have redirected Russian crude from Europe to Asia (primarily India and China), and Russia has been less transparent about its actual production levels. Nonetheless, Russia remains nominally part of the OPEC+ framework.

For OPEC+ production quota mechanics in detail, see our analysis of the OPEC production quota system and OPEC+ production strategy 2026.

How OPEC decisions flow to pump prices

The mechanism from OPEC cut announcement to pump price:

OPEC+ announces a production cut at its Ministerial Conference
Crude futures react immediately — Brent and WTI front-month prices rise within hours of the announcement (markets are forward-looking)
Physical crude prices follow — Dated Brent and other spot assessments rise within days as reduced crude volumes reach the market
Refinery input costs rise — refiners buying crude see their cost of goods increase; refinery gate prices rise
Wholesale product prices rise — Rotterdam ARA petrol and gasoil spot prices increase
Pump prices rise — forecourts pass through increased wholesale costs, typically with a 2–4 week lag

For the detailed lag mechanism, see our guide on oil price to pump price lag. For how to understand OPEC's impact as a driver of price volatility, see our fuel price volatility guide and our guide on how OPEC affects fuel prices.

For the OPEC International Seminar 2026, see our OPEC Seminar 2026 preview.

What is OPEC and how does OPEC affect petrol prices?

What is OPEC? The Organization of the Petroleum Exporting Countries is a cartel of 13 major oil-producing nations that coordinates production quotas to influence global oil supply and prices. How OPEC affects petrol prices is direct: when OPEC+ announces a production cut, global crude supply tightens, Brent and WTI futures rise within hours, and the increase flows through the refining and wholesale chain to reach pump prices within 2-6 weeks. The official OPEC website publishes meeting outcomes, production data and the OPEC Monthly Oil Market Report. The U.S. EIA Short-Term Energy Outlook regularly assesses how OPEC+ decisions will affect global oil prices in the coming quarters.

The impact of OPEC production changes on pump prices is dampened in high-tax markets (where excise duty forms a large fixed component of the price) and amplified in low-tax markets. A $10/barrel crude price increase driven by OPEC cuts translates to roughly 6-8 cents per litre at European pumps and 2-3 cents per litre in the US. The IEA Oil Market Report analyses how OPEC+ decisions interact with non-OPEC supply growth (primarily US shale) and demand trends to shape the global price outlook. The European Commission's weekly oil bulletin tracks how changes in the Brent benchmark flow through to European wholesale and retail fuel prices.

Frequently asked questions

What is OPEC and what does it do? OPEC is a 13-member intergovernmental organisation of major oil exporters founded in 1960 and headquartered in Vienna. It coordinates production quotas at biannual ministerial meetings to manage global oil supply and prices. Members control ~40% of global production and over 80% of proven reserves. Saudi Arabia is the dominant member with unique spare capacity.: OPEC is a 13-member intergovernmental organisation of major oil exporters founded in 1960 and headquartered in Vienna. It coordinates production quotas at biannual ministerial meetings to manage global oil supply and prices. Members control ~40% of global production and over 80% of proven reserves. Saudi Arabia is the dominant member with unique spare capacity.
What is OPEC+ and how is it different from OPEC? OPEC+ is OPEC's 13 members plus 10 non-OPEC producers (most importantly Russia, Kazakhstan, Azerbaijan, Oman) that agreed to coordinate production from December 2016. OPEC+ controls ~55% of global production collectively. Decisions are made in separate OPEC+ meetings and implemented as "additional voluntary cuts" layered on top of OPEC quotas. Russia's participation has been complicated by its Ukraine invasion and Western sanctions.: OPEC+ is OPEC's 13 members plus 10 non-OPEC producers (most importantly Russia, Kazakhstan, Azerbaijan, Oman) that agreed to coordinate production from December 2016. OPEC+ controls ~55% of global production collectively. Decisions are made in separate OPEC+ meetings and implemented as "additional voluntary cuts" layered on top of OPEC quotas. Russia's participation has been complicated by its Ukraine invasion and Western sanctions.
How do OPEC production cuts affect petrol prices? OPEC cuts reduce crude supply → crude futures react immediately on announcement → physical Brent/WTI prices rise → refinery input costs rise → wholesale product prices rise → pump prices rise, with a 2–6 week lag. A $10/bbl crude increase from OPEC+ cuts translates to ~6–8 ct/l at European pumps and ~2–3 ct/l in the US. The impact is cushioned by fixed excise duty in high-tax markets.: OPEC cuts reduce crude supply → crude futures react immediately on announcement → physical Brent/WTI prices rise → refinery input costs rise → wholesale product prices rise → pump prices rise, with a 2–6 week lag. A $10/bbl crude increase from OPEC+ cuts translates to ~6–8 ct/l at European pumps and ~2–3 ct/l in the US. The impact is cushioned by fixed excise duty in high-tax markets.