Organisation of the Petroleum Exporting Countries (OPEC)

Context (IT): The United Arab Emirates (UAE) announced its withdrawal from both OPEC and the broader OPEC+ alliance.

Rationale: The exit signals a shift towards prioritising domestic economic goals over the group’s collective supply discipline.
Capacity Impact: As OPEC’s third-largest producer, the UAE’s departure removes roughly 12-15% of the group’s total production capacity.
Recent Exits: The UAE has joined a growing list of recent OPEC departures, including Angola (2024) and Qatar (2019).
India Impact: For importers like India, the UAE’s independent production could lead to lower prices and a more diversified supplier base.

The Organisation of the Petroleum Exporting Countries is a permanent, intergovernmental organization established at the Baghdad Conference in 1960.
Founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Member countries: Algeria, Congo, Gabon, Equatorial Guinea, Iraq, Iran, Kuwait, Libya, Nigeria, Saudi Arabia, and Venezuela. Gabon rejoined the group in 2016.
Secretariat: Vienna, Austria.
Objective: To secure fair and stable prices for petroleum producers; an efficient, economic, and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.
It operates on the principle of unanimity, and one member, one vote.
Significance: 80% of the world’s proven crude oil reserves are located in the grouping Member Countries.
- India sources about 70% of crude oil, 60% of its Liquefied Petroleum Gas (LPG), and 30% of its liquefied natural gas (LNG), and 45% of petroleum products demand from OPEC.
Its Publication: World Oil Outlook
The OPEC Fund for International Development is a multilateral development finance institution established in 1976. It is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively.

Also known as the Vienna Group, it was created in 2016.
It is a coalition of OPEC and 10 non-OPEC countries that export crude oil.
- Non-OPEC countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
It pumps around 40% of the world’s crude oil.
These countries signed a Declaration of Cooperation undertaking a production adjustment to achieve lasting stability in the oil market in the interest of oil producers and consumers.

Frequently Asked Questions

What is OPEC?
OPEC is an intergovernmental organization of major oil-exporting countries formed in 1960 to coordinate petroleum policies.
When was OPEC established?
OPEC was established at the Baghdad Conference on 14 September 1960.
Which countries founded OPEC?
The founding members of OPEC were Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Where is the OPEC headquarters located?
OPEC’s headquarters is located in Vienna.
What is the main objective of OPEC?
OPEC aims to stabilize oil prices, ensure regular petroleum supply, and secure fair returns for investors.
Why did the UAE leave OPEC?
The UAE said it exited OPEC to focus on national interests and gain greater flexibility in oil production.
Why was OPEC+ created?
OPEC+ was created to coordinate production cuts and maintain stability in global oil markets.