Why in news?

Major oil-producing countries led by Saudi Arabia and Russia agreed to maintain their current output levels in a climate of uncertainty and ahead of fresh sanctions against Moscow coming into force.

Highlights

• The sanction is done by G-7 nations
• With $60-per-barrel price cap on Russian oil, that prevents seaborne shipments of Russian crude to the European Union, accounts for two thirds of the bloc’s oil imports from Russia, an attempt to deprive Moscow’s war chest of billions of euros

What is the issue?

• OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the US and other Western nations in October when it agreed to cut output by 2 million barrels per day (bpd), about 2% of world demand, from November until the end of 2023.
• OPEC+ described its October decision to as purely driven by market considerations, adding the necessity and the right course of action towards stabilising global oil markets
• October Decision : The representatives of the 13 members of OPEC led by Riyadh decided to stick to their course agreed in October of a production cut of two million barrels per day until the end of 2023

About Organization of the Petroleum Exporting Countries (OPEC )

• It is an intergovernmental organization of cartel of 13 countries.
• Founded :Baghdad(1960)
• Founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela,
• Headquartered : Vienna, Austria( Austria is not an OPEC member state).
• It has major influence on global oil prices that were previously determined by the so-called “Seven Sisters” grouping of multinational oil companies.
• Current OPEC members: Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela.
• Former Members : Ecuador, Indonesia and Qatar
• The chief executive of the organization is the OPEC secretary general.
• Operates on the principles of unanimity and “one member, one vote“, with each country paying an equal membership fee into the annual budget

Organization of the Petroleum Exporting Countries Plus (OPEC+)

• It is a loosely affiliated entity consisting of the 13 OPEC members and 10 of the world’s major non-OPEC oil-exporting nations.
• Aims : Regulate the supply of oil to set the price on the world market
• In 2016, OPEC formed the alliance known as OPEC+ with 10 other top oil-producing nations
• Member countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan

• OPEC+ regulates the supply of oil in order to influence the price of the commodity on the world market