Financial encyclopedia

The Organization of Petroleum Exporting Countries and its allies (OPEC+) will hold a meeting on November 30th, and each meeting will have a significant impact on the global crude oil market, so it has attracted the attention of investors.

What is OPEC?

OPEC refers to the Organization of Petroleum Exporting Countries (hereinafter referred to as Oil Group). Its founding members are five major oil exporting countries. Up to now, it has developed into 13 member countries. In 2021, OPEC's combined crude oil production accounts for about 33.1% of the global total, and its crude oil reserves account for about 71.8% of the world's proven crude oil reserves. Among them, Saudi Arabia has the largest output and has a greater say.

What is OPEC＋+?

OPEC+ refers to the organization of oil exporting countries and some non-member crude oil producing countries, including 10 non-OPEC members. OPEC+ crude oil production accounts for 64% of the world. Thus, OPEC+ controls most of the world's crude oil production, while OPEC+ aims to adjust oil supply and price through coordinating policies.

How does OPEC meeting affect oil prices?

The goal of OPEC is to control oil prices by adjusting supply. If member countries are interested in raising oil prices, they can reduce production quotas to limit supply. On the contrary, if they want to reduce the price of oil, they can raise the production quota to increase the supply. Assuming that demand remains unchanged, oil prices will move in the expected direction.

Although OPEC can only affect oil prices, oil prices are implicated in enterprise production and people's living costs, which in turn has a major impact on the economy. Therefore, every OPEC production reduction meeting deserves everyone's attention!