Organization of the Petroleum Exporting Countries (OPEC)

OPEC was established at a conference in Baghdad, Iraq, held from 10 to 14 September 1960. Its five founding members were Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela; the organization was formally constituted in January 1961. The immediate backdrop included oil companies' unilateral reductions in posted crude prices, which oil-exporting governments regarded as a threat to their revenues and authority over natural resources. A contemporary U.S. diplomatic memorandum records that the founders sought a forum to coordinate oil policies and safeguard their shared and individual interests. OPEC's stated objectives also include fair and stable prices for producers, an efficient and regular petroleum supply for consumers, and a fair return for investors. Its headquarters moved from Geneva to Vienna in 1965.

OPEC is an intergovernmental organization whose members are sovereign states. Its membership has changed over time as countries joined, suspended participation, or withdrew; historical membership should therefore not be mistaken for a current roster. Member governments meet through the OPEC Conference to discuss petroleum policy, while the Secretariat supports the organization's research and administrative work. Members have different production capacities, reserves, economies, and political interests, so reaching and carrying out common policy can be difficult. Each member retains control of its own petroleum policy, and agreed production targets are not always met in full.

OPEC's main market instrument is coordination of member production. By setting production targets, members can collectively increase or reduce the amount of oil they plan to supply. Lower targets have often been associated with higher prices, but the result depends on how much production actually changes and on conditions elsewhere in the market. The U.S. Energy Information Administration notes that members do not always adhere to agreed targets and that disruptions, expectations about future supply and demand, and changes in non-OPEC production can also move prices. OPEC can consequently have substantial influence at some times without setting a fixed world price or controlling every producer.

OPEC is distinct from OPEC+, a broader cooperation framework involving OPEC members and participating oil-producing countries outside the organization. The framework began with the Declaration of Cooperation agreed on 10 December 2016, after a period of falling oil prices and discussions between OPEC and non-OPEC producers. Under it, participants have coordinated production adjustments, while remaining separate governments and organizations. The distinction matters: references to OPEC+ describe this wider cooperation, not an expansion of OPEC's formal membership into a single organization.