The Organization of the Petroleum Exporting Countries, an intergovernmental cartel that emerged in Baghdad in 1960, has long shaped global energy markets through coordinated production decisions. Its founding five nations — Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela — gathered to push back against a small group of dominant Western oil companies that then controlled much of the world’s crude output. Today, OPEC counts 13 members, but the bloc’s influence has been uneven since the 1980s, with members often exceeding pledged output quotas.
A broader coalition known as OPEC+, formed in late 2016, now includes allied producers such as Russia, allowing for tighter market management. In June 2024, OPEC+ agreed to extend production cuts of 2.2 million barrels per day through 2025, a move widely interpreted as an effort to support prices amid concerns about weakening global demand and rising supply from non-member countries.
The group’s total production stood at roughly 28.5 million barrels per day in 2024.
Iran’s Founding Role and Sharply Reduced Output
Iran, one of the original five signatories, remains the third-largest producer inside the bloc. Yet its output has fallen markedly in recent years. In 2024, Iran pumped 3.2 million barrels per day, a steep decline from the 4.7 million barrels per day it produced in 2017.
That drop is largely attributed to sanctions imposed by the United States. The country’s export figures tell a similar story: only 500,000 barrels per day in 2024, down from 2.5 million barrels per day in 2017.
Iran’s capacity to pump significantly more crude remains intact, but the sanctions have constrained its ability to sell on international markets. That gap between potential output and actual production has limited Tehran’s influence within OPEC, even as its founding status gives it a seat at the table. The country has been a member since the organization’s inception in 1960, alongside the other four founders, and its current export volume represents but a fraction of what it once shipped abroad.
For Iran, the path forward depends at least as much on geopolitics as on oil economics.
OPEC+ Decisions and Global Market Implications
The production cuts extended through 2025 signal that OPEC+ expects market conditions to remain uncertain. The decisions made in June 2024 came as part of an effort to steady crude prices, which can have far-reaching consequences for households and governments around the world. OPEC’s history shows that coordinated production limits can have a lasting impact; during the 1970s, such policies sent crude prices sharply higher and left a lasting mark on economies worldwide.
Over the following decades, members moved to take control of their own oil sectors, shifting power away from the old corporate oligopoly that had dominated the industry. But since the 1980s, the group’s sway over supply and price steadiness has been uneven.
The formation of OPEC+ in late 2016 created a broader coalition that now coordinates with outside producers, allowing the cartel to manage market dynamics more tightly. Its choices now reach beyond member states, touching fuel costs and trade flows for economies large and small. With Iran’s production and exports heavily constrained, the coming months will be closely watched as OPEC navigates an environment of extended cuts, uncertain demand, and rising non-member supply.
For the United States and its allies, the sanctions regime remains a key tool in limiting Iran’s oil revenue, while OPEC’s internal dynamics continue to evolve in a world shaped by both market forces and geopolitical rivalries.
