The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing nations that collaborate to control and influence global oil prices. Founded in 1960, OPEC currently consists of 12 member countries that together account for a significant portion of global oil production and hold the majority of the world's proven oil reserves. OPEC's influence on the global oil market is substantial, as they play a key role in setting production levels and impacting oil prices worldwide.
1949: Venezuela Initiates Communication Among Petroleum-Exporting Nations
In 1949, as the world was recovering from World War II, Venezuela took the initiative to foster closer relationships among petroleum-exporting nations. This initiative involved inviting Iran, Iraq, Kuwait, and Saudi Arabia to engage in discussions about their shared interests, setting the stage for future collaborations.
1953: US-UK Sponsored Coup in Iran
In 1953, the US and UK orchestrated a coup against Iran's Prime Minister, Mohammad Mosaddegh, following his decision to nationalize Iran's oil production. This event underscored the geopolitical tensions surrounding oil and the lengths to which Western powers would go to maintain control over global oil supplies.
February 1959: Multinational Oil Companies Cut Prices, Leading to Maadi Pact
In February 1959, multinational oil companies (MOCs) reduced posted prices for Venezuelan and Middle Eastern crude oil, angering producing nations. This led to the Maadi Pact, an agreement between Saudi Arabia and Venezuela to call for an "Oil Consultation Commission" to address price changes.
August 1960: MOCs Announce Further Price Cuts, Igniting Tensions
In August 1960, MOCs again unilaterally cut posted prices for Middle Eastern crude oil, despite warnings from producing countries. This move heightened tensions and fueled resentment against the MOCs' control over oil operations.
September 1960: Founding of OPEC
In September 1960, OPEC was founded in Baghdad by five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. This marked the beginning of a new era in the global oil market, as oil-producing countries began to cooperate to exert more control over their resources.
September 1960: Formation of OPEC in Response to Price Manipulation
In September 1960, the Baghdad Conference was held, where representatives from Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela met to discuss the manipulation of crude oil prices by MOCs. This historic meeting resulted in the formation of OPEC, aiming to secure better prices and counter unilateral actions by oil companies.
1960: Definition of OPEC by the Oxford Dictionary of Energy Science
The Oxford Dictionary of Energy Science in 2017 defined OPEC as an organization established in 1960 to harmonize the petroleum policies of its member countries. The initial goal was to ensure a consistent oil supply to consuming nations at a price that provided a reasonable return on investment.
1961: Qatar Joins OPEC
Qatar became a member of OPEC in 1961.
September 1965: OPEC Relocates Headquarters to Vienna
In September 1965, OPEC moved its headquarters from Geneva, Switzerland to Vienna, Austria. This relocation was prompted by Switzerland's refusal to extend diplomatic privileges to OPEC due to policies on foreign populations. Austria welcomed OPEC, seeing an opportunity to attract international organizations.
1970: Libya Negotiates Improved Profit Agreement, Prompting Similar Demands
In 1970, Libya secured a 58/42 profit agreement with Occidental Petroleum, a departure from the prevailing 50/50 agreements. This move encouraged other OPEC members to demand better terms in their agreements with oil companies.
April 1971: Tripoli Agreement Increases Oil Prices and Profit Shares
On April 2, 1971, the Tripoli Agreement was signed between major oil companies and OPEC members operating in the Mediterranean region. This agreement led to increased oil prices and a greater share of profits for the producing countries.
October 1973: OAPEC Declares Oil Embargo Against Israel's Supporters
In October 1973, the Organisation of Arab Petroleum Exporting Countries (OAPEC) declared an oil embargo targeting the United States and other nations that supported Israel in the Yom Kippur War. This embargo, unlike the less effective one in 1967 after the Six-Day War, caused oil prices to surge from $3 to $12 per barrel.
1973: Checkbook Diplomacy and Increased Foreign Aid
Following 1973, some Arab nations, driven by "checkbook diplomacy," became major providers of foreign aid, with OPEC incorporating the goal of using oil revenue for the socio-economic development of poorer countries.
1973: Saudi Arabia's long-term oil strategy
In 1973, Saudi Arabian Oil Minister Yamani articulated the nation's long-term approach to oil production. He famously stated, "The Stone Age didn't end because we ran out of stones." This underscored Saudi Arabia's strategy of ensuring a steady oil supply to support global economic growth, aiming to prevent high prices that might encourage alternative energy sources.
1973: OPEC Raises Oil Prices, Triggering the 1973 Oil Crisis
In 1973, emboldened by a tight oil market and increased control over oil production due to nationalizations, OPEC members unilaterally raised oil prices. This decision led to the 1973 oil crisis, which had a significant impact on the global economy.
1973: Yom Kippur War
The Yom Kippur War, another major conflict in the Middle East, erupted in 1973. This war, like the Six-Day War, had a notable impact on global oil supplies and prices due to the involvement of several Arab oil-producing nations.
March 1974: Oil Embargo Ends, but Prices Continue to Rise
Despite the end of the oil embargo in March 1974 after intense diplomatic negotiations, oil prices continued to climb. The global economy faced a recession with rising unemployment, inflation, and declining stock and bond prices. This period marked a dramatic end to the post-WWII economic boom.
April 1974: Algerian President Highlights Hope for Developing Countries
In April 1974, during a speech at the UN, Algerian President Houari Boumédiène conveyed a sense of hope among some Non-Aligned Movement members. They viewed the power wielded during the oil embargo as a potential source of positive change for developing nations.
March 1975: OPEC Special Fund Conceived
In March 1975, the idea for the OPEC Special Fund, intended to aid developing nations, was formed in Algiers, Algeria.
1975: Hostage Siege by Palestinian Militants
In 1975, a hostage siege orchestrated by Palestinian militants unfolded. This event further highlighted the geopolitical complexities and tensions in the Middle East, which often had repercussions for global oil markets.
1979: Saudi Arabia's Oil Production Peaks
Between 1979 and 1981, Saudi Arabia's oil production peaked at 10 million barrels per day.
1979: Iranian Revolution
The Iranian Revolution in 1979 marked a turning point in Iranian history and had profound implications for the global oil market. The revolution led to significant disruptions in Iranian oil production and exports, contributing to volatility in global oil prices.
May 1980: OPEC Special Fund Becomes Official Development Agency
In May 1980, the OPEC Special Fund transitioned into an official international development agency and was renamed the OPEC Fund for International Development. It was also granted Permanent Observer status at the United Nations.
1981: Saudi Arabia's Oil Production at 10 Million Barrels Daily
Between 1979 and 1981, Saudi Arabia's oil production peaked at 10 million barrels per day.
1981: Saudi Arabia's Oil Revenue Peaks
In 1981, Saudi Arabia's oil revenue reached a high of $119 billion.
1982: Start of Analysis on OPEC's Effectiveness
An analysis spanning from 1982 to 2009 by political scientist Jeff Colgan examined OPEC's effectiveness in achieving its stated goals.
1982: Saudi Arabia Pushes for Production Quotas
In 1982, in response to declining oil revenues, Saudi Arabia urged OPEC to implement audited national production quotas to control output and increase prices.
1983: Standardized Contracts for Crude Oil Benchmarks Introduced in Major Futures Markets
The use of crude oil benchmarks gained prominence in 1983 with the introduction of standardized contracts in major futures markets. These benchmarks provide a reference price for buyers and sellers of crude oil, simplifying transactions and providing market transparency.
1985: Saudi Arabia Slashes Oil Production
By 1985, after other OPEC nations didn't adhere to production quotas, Saudi Arabia drastically cut its oil production to one-third of its 1979-1981 level, which was 10 million barrels per day. When this failed to boost prices, Saudi Arabia flooded the market with cheap oil, causing prices to plummet below US$10/bbl and impacting higher-cost producers.
1985: OPEC's Market Share Drops to Under 30%
By 1985, OPEC's market share had declined to less than 30% from its peak of around 50% in 1979. This decrease was driven by factors like increased non-OPEC oil production and decreased global demand.
1985: Saudi Arabia's Oil Revenue Declines Sharply
By 1985, Saudi Arabia's oil revenue had plummeted to $26 billion, a stark contrast from its 1981 peak of $119 billion. This decline led to significant budget deficits and doubled the country's debt, reaching 100% of its GDP.
1986: OPEC's Market Share Declines as Oil Prices Plummet
By 1986, global oil demand decreased, non-OPEC production increased, and OPEC's market share fell from 50% in 1979 to under 30% in 1985. This shift in the oil market, partly caused by decreased reliance on OPEC oil and increased production elsewhere, led to a six-year decline in oil prices, culminating in a significant drop in 1986.
1986: OPEC Members Implement Production Quotas
Facing economic difficulties, OPEC members, who had previously not adhered to production agreements, started limiting output in 1986 to stabilize prices. This decision was based on carefully negotiated national quotas that aimed to balance oil-related factors with economic considerations.
1986: Oil Prices Return to 1986 Levels
The Asian financial crisis, which began in 1997, caused a decrease in oil demand, leading to oil prices falling back to their 1986 levels. This spurred joint diplomatic efforts to reduce oil production by OPEC, Mexico, and Norway.
1989: Collapse of the Soviet Bloc
The collapse of the Soviet bloc in 1989 was partly influenced by the economic hardship caused by declining oil prices, which pressured oil-exporting nations to stabilize the market.
August 1990: Iraq Invades Kuwait
In August 1990, Iraqi President Saddam Hussein initiated the invasion of Kuwait, aiming to influence OPEC to reduce oil production and raise prices, ultimately seeking financial benefits for OPEC members and funds for post-war rebuilding following the Iran-Iraq War (1980-1988).
1990: Iraqi Occupation of Kuwait
The Iraqi invasion and subsequent occupation of Kuwait in 1990 sent shockwaves through the global oil market. This event led to a surge in oil prices and raised concerns about global oil supplies.
1991: End of the Iraqi Occupation of Kuwait
The Iraqi occupation of Kuwait came to an end in 1991 following international intervention. The end of this conflict brought some stabilization to oil markets but highlighted the ongoing geopolitical risks in the region.
December 1992: Ecuador Withdraws from OPEC
In December 1992, Ecuador left OPEC because it was unwilling to pay the annual US$2 million membership fee and wanted to produce more oil than its OPEC quota allowed. However, it rejoined the organization in October 2007.
December 1992: Ecuador Withdraws from OPEC Over Production Quotas and Membership Fees
In December 1992, Ecuador made the decision to leave OPEC. The country was unwilling to pay the annual US$2 million membership fee and believed it needed to produce more oil than its OPEC quota allowed at the time.
1994: "Carlos the Jackal" Captured
In 1994, "Carlos the Jackal", the mastermind behind the 1975 OPEC hostage crisis, was apprehended. He is currently serving multiple life sentences for his involvement in various acts of terrorism, including murder.
1997: Asian Financial Crisis Impacts Oil Prices
The Asian financial crisis, which began in 1997, caused a decrease in oil demand, leading to oil prices falling back to their 1986 levels.
1998: Oil Prices Drop to 1986 Levels
The Asian financial crisis, which began in 1997, caused a decrease in oil demand, leading to oil prices falling back to their 1986 levels. This spurred joint diplomatic efforts to reduce oil production by OPEC, Mexico, and Norway.
1998: Iraq Excluded from OPEC Quota Agreements
From 1998 to 2016, Iraq, despite being an OPEC founding member, was excluded from OPEC quota agreements due to its internal political challenges.
2000: OPEC Establishes the OPEC Reference Basket of Crudes
The year 2000 marked the establishment of the OPEC Reference Basket of Crudes, a significant benchmark for oil prices. This basket represents a weighted average of prices for various petroleum blends from OPEC member countries, providing a representative indicator of the cartel's overall oil pricing.
April 2001: OPEC Initiates Joint Oil Data Exercise
In April 2001, OPEC partnered with five other international organizations to enhance the transparency and accuracy of oil data by launching the Joint Oil Data Exercise.
September 2001: Al Qaeda Attacks the US
The Al Qaeda attacks on the US in September 2001 had a relatively small and short-lived impact on oil prices as Saudi Arabia and other oil-producing nations worked to maintain global supply.
2001: September 11 Attacks
The September 11 attacks in 2001 had wide-ranging consequences, including impacts on the global oil market. While not directly causing oil supply disruptions, these attacks led to increased geopolitical uncertainty and influenced energy markets.
January 2002: OPEC and Non-OPEC Nations Agree to Production Cuts
On January 1, 2002, OPEC, Norway, Mexico, Russia, Oman, and Angola agreed to reduce oil production for six months. This decision was made after oil prices slumped in November 2001, with OPEC contributing 1.5 million barrels per day (mbpd) out of the approximately 2 mbpd reduction.
March 2003: US Invasion of Iraq
The US invasion of Iraq in March 2003 had a relatively minor and temporary impact on oil prices as Saudi Arabia and other exporters collaborated to ensure sufficient global oil supplies.
April 2003: Starting point of a historic rise in the OPEC Reference Basket
April 2003 marked the beginning of a significant upward trend in the OPEC Reference Basket, with the price at US$23.27/bbl. This marked the start of a period of sustained growth in oil prices.
June 2003: First Joint Workshop Between IEA and OPEC
June 2003 marked the first joint workshop between the International Energy Agency (IEA) and OPEC, focusing on energy-related issues. Since then, these organizations have continued to hold regular meetings to enhance their understanding of energy trends, analyses, and perspectives, ultimately promoting market transparency and predictability.
2003: Start of the American Occupation of Iraq
The US-led invasion of Iraq in 2003 and the subsequent occupation marked another significant event impacting global oil markets. The war and its aftermath led to instability in Iraq, a major oil-producing country, affecting global oil production and prices.
2003: Start of the American occupation of Iraq and its impact on oil prices
The American occupation of Iraq in 2003, marked by insurgency and sabotage, coincided with surging oil demand from China and investors. This, along with disruptions in Nigeria's oil industry and shrinking spare capacity, led to a sharp rise in oil prices.
2004: Start of the Conflict in the Niger Delta
The Conflict in the Niger Delta, which erupted in 2004, highlighted the challenges faced by oil-producing regions grappling with environmental degradation, poverty, and violence. This conflict, ongoing since its inception, has often disrupted oil production in Nigeria.
2005: Joint Oil Data Exercise Evolves into JODI
The Joint Oil Data Exercise, launched in 2001, expanded its scope and membership in 2005, becoming the Joint Organisations Data Initiative (JODI). JODI now encompasses data from a wider range of organizations, covering a significant portion of the global oil market.
October 2007: Ecuador Rejoins OPEC
After leaving OPEC in December 1992 due to membership costs and production quotas, Ecuador rejoined the organization in October 2007.
October 2007: Ecuador Rejoins OPEC
In October 2007, Ecuador rejoined OPEC after leaving the organization in 1992.
2007: OPEC Begins Publishing "World Oil Outlook"
Starting in 2007, OPEC has annually published its "World Oil Outlook" (WOO), a comprehensive report providing insights into the global oil industry, including supply and demand projections.
May 2008: Indonesia announces departure from OPEC
In May 2008, Indonesia declared its intention to withdraw from OPEC upon the expiry of its membership at the end of the year. This decision stemmed from Indonesia's transition to becoming a net oil importer, making it unable to fulfill its production quota.
May 2008: Indonesia Announces Departure from OPEC
Indonesia declared its intention to leave OPEC in May 2008, with its membership set to expire at the end of the year. This decision stemmed from Indonesia's transition to becoming a net importer of oil and its inability to meet OPEC's production quota requirements.
July 2008: Record high for the OPEC Reference Basket
July 2008 witnessed a record high for the OPEC Reference Basket, reaching US$140.73/bbl, underscoring the period of price volatility and market fluctuations.
September 2008: Production dispute and price drop
Despite oil prices remaining high in September 2008, a dispute erupted within OPEC. Saudi Arabia opposed a vote by other members to reduce output and reportedly left the meeting. Although officially agreeing to the new quotas, anonymous Saudi delegates indicated they would prioritize meeting market demand. Subsequently, oil prices fell drastically to the US$30s.
September 2008: OPEC officially confirms Indonesia's withdrawal
OPEC officially acknowledged Indonesia's decision to exit the organization in September 2008. OPEC expressed regret over the decision but maintained hope for Indonesia's potential return in the future.
2008: Previous OPEC Production Cut
Prior to the 2016 agreement, OPEC's last production cut occurred in 2008, highlighting the significance of the decision made in response to the oil market dynamics of the time.
2008: US oil production approaches swing producer levels
By 2015, boosted by years of high oil prices and technological improvements, the US saw its oil production nearly double from its 2008 levels. This brought the US close to the production volumes of leading "swing producers" like Saudi Arabia and Russia.
2008: Record high oil prices and the global financial crisis
In 2008, oil prices reached unprecedented levels, with WTI crude oil peaking at US$147/bbl in July. However, the global financial crisis triggered a sharp decline to US$32/bbl in December, highlighting the extreme volatility in the oil market. OPEC's revenue hit a record high that year despite the volatility.
2009: End of Analysis on OPEC's Effectiveness
The analysis, concluding in 2009, revealed that OPEC members frequently deviated from their commitments, raising questions about the organization's ability to effectively control global oil supply and prices.
2010: Start of the Arab Spring
The Arab Spring, a series of pro-democracy uprisings that swept across the Arab world beginning in 2010, had a profound impact on the Middle East and North Africa. These uprisings led to political changes in several oil-producing countries, influencing oil production and global energy markets.
2011: Oil prices rebound amidst Libyan Civil War
Oil prices rebounded to US$100 per barrel in 2011 during the Libyan Civil War, highlighting the geopolitical factors influencing oil markets.
2011: Libyan Civil War, Arab Spring, and OPEC's response to speculation
The 2011 Libyan Civil War and the Arab Spring uprisings further impacted the oil market. OPEC, during this time, began publicly addressing what they perceived as "excessive speculation" in oil futures, holding financial speculators responsible for price fluctuations beyond fundamental market factors.
2011: End of the American Occupation of Iraq and Start of the Libyan Crisis
The year 2011 saw two significant events: the end of the US occupation of Iraq and the outbreak of the Libyan Crisis. Both events had implications for global oil markets, as they brought about changes in political landscapes and oil production capacities.
2012: End of the Arab Spring and Start of the International Embargo Against Iran
The year 2012 marked both the waning of the Arab Spring and the imposition of stricter international sanctions against Iran over its nuclear program. These events had repercussions for global oil markets, affecting oil prices and trade flows.
June 2014: High point of the OPEC Reference Basket
The OPEC Reference Basket reached a high point of US$110.48 in June 2014, reflecting a period of relatively high oil prices before the subsequent decline.
November 2014: Saudi Arabia blocks OPEC production cuts
Despite a global oil glut in November 2014, Saudi Arabia's oil minister, Ali Al-Naimi, rejected calls from other OPEC members to cut production and support prices. Naimi argued for letting the market rebalance naturally at lower prices, aiming to undercut the profitability of high-cost US shale oil production and regain market share for OPEC.
November 2014: IEA Estimates OPEC's Spare Capacity
In November 2014, the International Energy Agency (IEA) estimated that OPEC's adjusted spare capacity was 3.5 million barrels per day, with an expected increase to 4.6 million barrels per day by 2017.
2014: OPEC exceeds production ceiling, China's growth slows, and US oil production surges
Throughout 2014 and 2015, OPEC members consistently produced more oil than their set limit. Concurrently, China's economic growth decelerated, and US oil production, fueled by advancements in shale "fracking" technology, nearly doubled from its 2008 levels.
2014: GECF Joins JODI
The Gas Exporting Countries Forum (GECF) joined JODI as a partner in 2014, further expanding the initiative's reach to encompass a substantial portion of the global natural gas market.
2014: Sustained high oil export revenue for OPEC
Between 2011 and 2014, OPEC experienced a period of high oil export revenue, reaching levels comparable to those seen in 2008. This period also saw significant "petrodollar recycling," influencing global financial flows.
2014: Oil Prices Return to 2014 Levels
The surge in oil prices in October 2021 marked a return to levels last seen in 2014, highlighting the significant impact of global events and market dynamics on oil price fluctuations.
October 2015: Sudan Applies for OPEC Membership
In October 2015, Sudan formally submitted an application to become a member of OPEC, but its membership was still pending as of the latest updates.
November 2015: IEA Revises Assessment of OPEC's Spare Capacity
By November 2015, the IEA revised its assessment, noting that OPEC's spare production buffer was "stretched thin" due to Saudi Arabia and its Gulf neighbors pumping oil at near-record rates.
December 2015: OPEC abandons production ceiling amidst market pressures
OPEC, in December 2015, decided to abandon its ineffective production ceiling until its next meeting in June 2016. This decision was influenced by several factors, including OPEC's persistent overproduction, the resilience of US oil production, a global oil glut, and the anticipated return of Iranian oil output.
2015: Global oil oversupply and price decline
The increase in US oil production, coupled with OPEC exceeding its production ceiling, led to a global oversupply of oil in 2015. This oversupply, along with other factors, resulted in a substantial decrease in oil prices.
January 2016: Indonesia Rejoins OPEC
After previously leaving OPEC in 2008, Indonesia rejoined the organization in January 2016.
January 2016: OPEC Reference Basket price plummets
By January 2016, the OPEC Reference Basket had fallen to US$22.48/bbl, a significant drop from its peak in June 2014 and its record high in July 2008. This decline reflected the ongoing oil glut and the challenges faced by oil-producing nations.
June 2016: OPEC postpones production ceiling decision
OPEC decided to postpone any changes to its production ceiling until its next ministerial conference in June 2016, opting to monitor market developments and reassess the situation at a later date.
July 2016: Gabon Rejoins OPEC
Gabon resumed its OPEC membership in July 2016.
July 2016: Gabon Rejoins OPEC
Gabon rejoined OPEC in July 2016 after suspending its membership in January 1995 due to concerns about membership fees and production quotas.
September 2016: OPEC Agrees to First Production Cut Since 2008
In September 2016, driven by the need to stabilize oil prices amidst a supply glut, OPEC members reached a preliminary agreement to cut oil production. This marked the organization's first production cut since 2008.
November 2016: OPEC Formalizes Production Cut Agreement
OPEC formally ratified the production cut agreement at their November 2016 conference. The deal, intended to last for the first half of 2017, aimed to reduce output by 1 million barrels per day. This agreement excluded Libya and Nigeria, who were exempted due to internal disruptions affecting their oil production.
December 10, 2016: Joint OPEC and Non-OPEC Ministerial Meeting and Declaration of Cooperation
On December 10, 2016, a pivotal meeting between OPEC and non-OPEC oil-producing countries resulted in the signing of the Declaration of Cooperation (DoC). This agreement marked a new era of collaboration in the oil market, aiming to stabilize global oil prices and ensure a sustainable supply.
2016: Continued decline in oil prices
The oversupply of oil continued into early 2016, further driving down oil prices. This decline had a significant impact on oil producers, leading to adjustments and a decrease in US oil imports as the country moved closer to energy independence.
2016: End of the International Embargo Against Iran
The international sanctions against Iran were lifted in 2016, leading to Iran's return to the global oil market. This development influenced oil supply dynamics and impacted global oil prices.
2016: OPEC's Dominance in Global Oil Production and Reserves in 2016
In 2016, OPEC's combined oil production, including gas condensate, constituted 44% of the global total. Furthermore, OPEC members held a substantial 81.5% of the world's proven oil reserves, as reported by the U.S. Energy Information Administration (EIA).
2016: OPEC regains market share as oil glut eases
During 2016, the global oil oversupply decreased due to production declines in various countries, including the United States, Canada, Libya, Nigeria, and China. This allowed OPEC to regain some market share as oil prices gradually recovered to the US$40s. The organization, at its June meeting, chose to maintain existing production levels, aiming for prices that would satisfy both producers and consumers.
2016: Formation of OPEC+
In late 2016, a significant development took place in the global oil market with the formation of OPEC+. This expanded group included OPEC members and other major oil-producing countries, aiming to exert greater control over the global crude oil market.
May 2017: OPEC Extends Production Cuts Until March 2018
Assessing the oil market dynamics, OPEC decided in May 2017 to extend the existing production cuts until March 2018. The decision was made in a bid to further alleviate the global oil oversupply and support prices.
December 2017: OPEC and Russia Extend Production Cut Agreement
In a significant move, Russia joined OPEC in December 2017 to extend the existing production cut of 1.8 million barrels per day. The extension signaled continued cooperation between OPEC and non-OPEC producers to stabilize the oil market.
2017: OPEC+ Establishes Declaration of Cooperation (DoC)
In 2017, OPEC and non-OPEC countries, collectively known as OPEC+, formalized their cooperation through the Declaration of Cooperation (DoC). The DoC, extended multiple times due to its success, provides a framework for coordinating actions related to oil production and market stability.
2017: Signing of the Declaration of Cooperation (DoC)
Building on the agreement reached in the previous year, the Declaration of Cooperation (DoC) was formally signed in 2017 by OPEC+ member countries. The DoC's objective is to foster stability in the global oil market through production adjustments, regular dialogues, and information sharing among its signatories.
2017: Projected Peak of OPEC's Spare Capacity
The IEA projected that OPEC's spare capacity would reach a peak of 4.6 million barrels per day in 2017.
March 2018: Expiration of OPEC Production Cut Agreement
The production cut agreement, initially reached in late 2016 and subsequently extended, expired in March 2018. The market closely observed the impact of the agreement's expiration on global oil supply and prices.
2018: Year-Long Extension of Production Cuts
The December 2017 agreement extended the production cuts until the end of 2018, marking a full year of coordinated efforts between OPEC and Russia to influence global oil supply.
2018: Original Production Cuts of 2018
The June 2019 agreement extended the production cuts that were initially agreed upon in 2018, highlighting the continuous efforts to address oil market dynamics throughout the year.
January 2019: Qatar Withdraws from OPEC
Citing strategic considerations related to the ongoing diplomatic crisis with Saudi Arabia and its allies, Qatar officially withdrew its membership from OPEC effective January 1, 2019, marking a significant geopolitical development within the organization.
January 2019: Qatar Exits OPEC to Focus on Natural Gas Production
In January 2019, Qatar withdrew from OPEC to prioritize its natural gas production, a sector where it holds the position of the world's leading exporter of liquefied natural gas (LNG).
June 2019: Russia and Saudi Arabia Agree to Extend Production Cuts
In June 2019, Russia and Saudi Arabia, key players in the global oil market, reached a bilateral agreement to prolong the production cuts initiated in 2018. This extension, lasting for six to nine months, underscored their commitment to managing global oil supply.
October 2019: Ecuador Announces Withdrawal from OPEC
Citing financial challenges, Ecuador announced in October 2019 its decision to leave OPEC effective January 1, 2020. This marked the second country to withdraw from the organization within a year, signaling potential internal and external pressures.
December 2019: OPEC and Russia Agree to Deepen Production Cuts
Addressing concerns of oversupply, OPEC and Russia reached a significant agreement in December 2019 to implement some of the most substantial production cuts to date. Effective for the first three months of 2020, this decision aimed to significantly impact global oil supply.
January 2020: Ecuador Leaves OPEC Again
Citing the need for increased oil production and financial considerations, Ecuador once again withdrew from OPEC in January 2020.
January 2020: Ecuador's Withdrawal from OPEC Takes Effect
Ecuador's withdrawal from OPEC became official in January 2020, as the country sought to navigate its economic difficulties, potentially prioritizing its own production strategies.
March 2020: Saudi-Russian Price War and Geopolitical Tensions
The March 2020 breakdown of the OPEC+ alliance sparked a price war between Saudi Arabia and Russia, each seeking to secure their market share. This event exposed geopolitical tensions within the global oil market and raised concerns about the vulnerability of the U.S. shale oil industry.
March 2020: Breakdown of OPEC+ Alliance and Oil Price Crash
In a pivotal moment in March 2020, the OPEC+ alliance fractured as Russia rejected OPEC's proposal for deeper production cuts amidst the burgeoning COVID-19 pandemic. The disagreement, fueled by Russia's concerns about losing market share to American shale oil, led to the collapse of the three-year partnership and triggered a massive 30% drop in Brent crude prices.
April 2020: OPEC+ Agrees to Historic Production Cuts Amidst Pandemic
In a significant move in April 2020, OPEC and its allies, including Russia, reached an agreement to cut oil production by a record 9.7 million barrels per day, representing around 10% of global output. This unprecedented decision aimed to stabilize oil prices that had plummeted to historical lows due to the COVID-19 pandemic's impact on global demand.
June 2020: OPEC+ Introduces Compensation Mechanism
In June 2020, to address concerns about adherence to production cuts, all countries participating in the OPEC+ framework unanimously agreed to implement a Compensation Mechanism. This mechanism aimed to improve compliance with agreed-upon production targets and further enhance stability in the oil market.
2020: Previous Production Cut Highlighted
The October 2022 production cut underscored the significance of the previous such decision made in 2020, highlighting the ongoing efforts by OPEC+ to navigate global oil market volatility.
2020: OPEC+ Stabilizes Oil Markets Post-COVID-19 Pandemic
In 2020, in response to the collapse in oil demand due to the COVID-19 pandemic, OPEC countries, along with non-OPEC participants, played a crucial role in stabilizing oil markets. Their coordinated efforts helped to prevent extreme volatility in oil prices.
2020: OPEC Fund for International Development Stops Using OFID Abbreviation
As of 2020, the OPEC Fund for International Development ceased using the abbreviation OFID.
2020: Production Cuts to Last Through First Quarter
The December 2019 agreement outlined that the production cuts would remain in place for the first quarter of 2020, demonstrating a commitment to carefully managing oil market dynamics during this period.
July 2021: OPEC+ Reaches Compromise Deal After UAE Objects to Extension
In July 2021, OPEC+ faced internal discord when the United Arab Emirates objected to a proposed eight-month extension of oil output curbs. The UAE sought an increase in its production baseline, leading to a compromise deal where the country's output cap was raised. This agreement highlighted the delicate balance of interests within OPEC+ and underscored the group's commitment to unity.
August 2021: US Calls on OPEC+ to Increase Oil Production
With oil prices surging amidst recovering global demand, the United States, under the Biden administration, urged OPEC+ in August 2021 to boost oil production. The US government expressed concerns over the impact of high energy prices on the global economic recovery.
September 2021: US-Saudi Arabia Discussions on Oil Prices
In September 2021, high-level discussions took place between US officials, including National Security Advisor Jake Sullivan, and Saudi Crown Prince Mohammed bin Salman. The talks centered around concerns over soaring oil prices and potential avenues for cooperation.
October 2021: Oil Prices Reach Seven-Year High
By October 2021, oil prices reached their highest point in seven years, driven by the global surge in demand as economies rebounded from the COVID-19 pandemic. This price surge heightened concerns about inflation and potential economic repercussions.
May 2022: Gradual Increase in Oil Output Begins
As per the agreement reached in July 2021, OPEC+ members, including Russia, initiated a phased increase in oil production starting in May 2022. This gradual approach aimed to address the recovering global demand for oil while carefully managing market stability.
October 2022: OPEC+ Announces First Production Cut Since 2020
In a significant move, OPEC+ members agreed in October 2022 to cut oil production by 2 million barrels per day, marking the first such decision since 2020. This decision, aimed at supporting oil prices amidst global economic uncertainty, sparked renewed debates about energy security and potential inflationary pressures.
October 2022: OPEC+ Announces Large Cut to Oil Output Target
In October 2022, OPEC+, under the leadership of Saudi Arabia, decided to substantially reduce its oil output target with the aim of supporting Russia. This decision drew sharp criticism from the US, with President Biden promising "consequences" and a reassessment of US-Saudi relations.
2022: OPEC+ Continues Production Increases Through 2022
The gradual increase in oil production by OPEC+ members, as per the July 2021 agreement, continued throughout 2022. This strategy aimed to meet the growing global oil demand while closely monitoring market conditions.
2022: Saudi Arabia Defends OPEC+ Decision as "Purely Economic" Amidst US Accusations
In 2022, the White House refuted Saudi Arabia's claim that the OPEC+ production cut was "purely economic." The US alleged that Saudi Arabia had pressured other OPEC members into agreeing to the cuts, some of whom felt coerced. The US maintained that the decision lacked a market basis and would benefit Russia financially while undermining sanctions against Moscow.
2022: OPEC's Control Over Global Oil Production
In 2022, a report revealed that OPEC member countries were responsible for approximately 38% of global oil production, highlighting the significant influence the organization holds over the global energy landscape.
2022: Shift in OPEC's Share of Global Oil Production in 2022
By 2022, OPEC member countries were responsible for approximately 38% of the world's crude oil production, reflecting a decrease in their overall share of global output. However, these countries still held an estimated 79.5% of the globe's proven oil reserves, underscoring their continued significance in the global oil market.
November 2023: Nigeria and Angola Express Dissatisfaction with OPEC Quotas
During an OPEC meeting in November 2023, both Nigeria and Angola, major oil-producing nations in Sub-Saharan Africa, voiced their concerns about OPEC's production quotas. They argued that these quotas hindered their efforts to increase oil production and strengthen their foreign reserves.
December 2023: Angola Announces Departure from OPEC
In December 2023, Angola announced its decision to leave OPEC, citing its disagreement with the organization's production quotas, which it believed were unfavorable to its economic interests.
2023: OPEC Rejects IEA's Fossil Fuel Demand Forecast
In 2023, the International Energy Agency (IEA) predicted that global demand for fossil fuels would peak by 2030. OPEC disagreed with this forecast and criticized calls to halt investments in new oil and gas projects based on such predictions.
January 2024: OPEC Membership and Production Influence as of January 2024
As of January 2024, OPEC comprises 12 member countries. Despite fluctuations in global production shares over the years, OPEC members collectively hold a significant portion of the world's proven oil reserves, with the Middle East playing a dominant role.
2024: Speculation Arises Over Saudi Motives for OPEC+ Decision
According to a report in The Intercept, there was speculation that Saudi Arabia's push for deep cuts in oil production in 2022 was intended to influence the 2024 US presidential election in favor of Donald Trump.
2024: Saudi Arabia's Energy Minister emphasizes a balanced energy transition
Saudi Energy Minister Prince Abdulaziz bin Salman, in 2024, emphasized the importance of a balanced and equitable global energy transition. He highlighted Saudi Arabia's investments in natural gas, petrochemicals, and renewable energy sources, aligning with global climate goals and supporting developing nations' economic growth.
2030: IEA Predicts Peak Fossil Fuel Demand
The IEA predicted in 2023 that global demand for fossil fuels, including oil, natural gas, and coal, would reach its highest point by 2030.