OPEC meets every few months and collectively decides how much oil its members will produce. That decision affects petrol prices in every country on earth. Here's how a group of 13 nations came to have this much influence -- and what their current position means for your bills.
OPEC+ (OPEC plus Russia and allies) controls ~40% of global oil production and holds ~80% of proven reserves. When the group decides to cut by 1 million barrels/day, it typically raises Brent by $3-8/barrel within weeks.
The Organisation of the Petroleum Exporting Countries was founded in Baghdad in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela -- five countries that wanted collective bargaining power against Western oil companies that were setting prices unilaterally. Over the following decade, Libya, UAE, Algeria, Nigeria, Ecuador and others joined. Today's 13 members collectively hold the majority of the world's cheapest-to-produce oil reserves.
OPEC is a cartel -- a group of producers who coordinate to influence market prices. Cartels are illegal in most domestic markets but operate legally in the international sphere. The group sets production quotas for each member, though enforcement is imperfect and cheating is common. Saudi Arabia, as the largest producer and the only member with significant genuine spare capacity, effectively leads the group.
In 2016, after US shale production had grown enough to significantly erode OPEC's market control, Saudi Arabia negotiated the "Vienna Agreement" with Russia and nine other non-OPEC producers. This OPEC+ grouping added approximately 10 million barrels/day of production to the coordination framework -- enough to reassert meaningful market influence even with US shale growth.
Russia is the most important OPEC+ non-member partner. Russian compliance with agreed cuts has been inconsistent -- Russia has a much more decentralised production structure than Saudi Arabia, making quota enforcement harder. Since 2022, the Russia-Saudi relationship has been tested by Western sanctions on Russian oil, which have diverted Russian crude to Asian markets at discounted prices, partially undermining OPEC+ price support.
The mechanism is straightforward: OPEC cuts production → global supply tightens → Brent crude price rises → wholesale refined product prices rise → pump prices rise 1-3 weeks later. The magnitude depends on how much the cut tightens the supply-demand balance. A 500,000 barrel/day cut in a well-supplied market moves prices less than a 500,000 barrel/day cut when inventories are already low.
The current OPEC+ position (March 2026): The group has been maintaining voluntary cuts of approximately 2.2 million barrels/day since late 2023, with Saudi Arabia bearing a disproportionate share. Several members (Iraq, Kazakhstan, UAE) have been producing above quota. The group has scheduled a gradual production increase in Q2 2026 -- but this may be delayed or reversed if the Iran situation pushes prices high enough to threaten demand.
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