VIENNA, July 14 — The Organization of the Petroleum Exporting Countries, the cartel that controls a massive share of the world’s oil, has shaped global economics and geopolitics for more than six decades. For the average American, OPEC’s decisions often translate into a concrete reality: the price at the gas station. Founded in Baghdad in September 1960, OPEC started with five members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
Its stated mission was straightforward—coordinate petroleum policies and ensure stable oil prices. What began as a cooperative of major producers has since evolved into a powerful bloc that can move markets.
The 1973 Oil Embargo and OPEC’s Power
OPEC’s influence was dramatically demonstrated during the 1973 oil embargo. Arab members cut exports to the United States and other allies of Israel, causing crude prices to quadruple and triggering a global recession. It was a stark lesson in how dependent the West had become on foreign oil, and it cemented OPEC’s reputation as a geopolitical heavyweight.
Today, OPEC has 13 member countries as of 2024. The cartel controls approximately 40% of global oil production and holds about 80% of proven oil reserves.
Think of it like a group of major farmers controlling the majority of the wheat supply—when they decide to harvest less, the price of bread goes up everywhere.
OPEC+ and the Russia Factor
In 2016, OPEC formed a broader alliance known as OPEC+, bringing in non-OPEC producers like Russia to manage supply. This expanded the cartel’s reach and added a layer of complexity, particularly given Russia’s role as a major energy exporter. Key figures in these negotiations include Saudi Energy Minister Prince Abdulaziz bin Salman, who often serves as a public face for the group’s supply decisions.
The practical upshot for American drivers is direct. When OPEC and OPEC+ agree to cut production, global supply tightens and prices tend to rise.
When they increase output, prices can fall. The cartel’s decisions are closely watched by the U.S. administration, which has its own tools to influence domestic energy markets.
What to Watch Next
With OPEC controlling such a large share of proven reserves and production, its internal politics and external partnerships will continue to shape energy costs for American consumers. The next round of OPEC+ meetings will be closely scrutinized for any signs of supply adjustments. In plain terms, what happens in Vienna—or Riyadh, or Moscow—still matters a great deal at the pump in Peoria.
Sources
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