Organisation of the Petroleum Exporting Countries

Why is in news? OPEC Explores Potential Membership Expansion through Consultations with Azerbaijan, Malaysia, Brunei, and Mexico

The Secretary-General of the Organisation of the Petroleum Exporting Countries (OPEC) has disclosed that OPEC is actively considering expanding its membership by engaging in consultations with Azerbaijan, Malaysia, Brunei, and Mexico.

He highlighted the significance of consulting with external countries as a means to reinforce OPEC's unity.

He clarified that the organization's aim is not to add a specific number of countries, but rather to identify nations that share strategic objectives in preserving and stabilizing oil markets.

He also emphasized that they faced substantial challenges during market downturns and the global pandemic in 2020. As a result, all four countries share a common goal aligned with the interest of stabilizing oil markets.

These consultations mark OPEC's proactive approach to shaping the future of global energy dynamics. The outcomes of these discussions and their potential implications for the oil industry will be closely watched.

OPEC:

It was established in 1960 by founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, OPEC has since expanded and has 13 member states.

With the addition of another 11 allied major oil-producing countries that include Russia, the grouping is known as OPEC+. i.e., OPEC+ is a group of 24 oil-producing nations.

OPEC+ format was born in 2017 with a deal to coordinate oil production among the countries in a bid to stabilize prices.

The OPEC bloc is nominally led by Saudi Arabia, the group’s largest oil producer, while Russia is the biggest player among the non-OPEC countries.

OPEC countries effectively control more than 79% of the world’s crude supplies, regulating oil prices as per their interests.

Objective of OPEC Countries:

To coordinate and unify the petroleum policies of its Member Countries;

To ensure the stabilization of oil markets;

To secure an efficient, economic, and regular supply of petroleum to consumers, a steady income to producers

To ensure a fair return on capital for those investing in the petroleum industry