OPEC

On April 28, 2026, the United Arab Emirates announced its intention to exit OPEC effective May 1, 2026, ending nearly six decades of membership. The decision reflects shifting national energy priorities and marks a significant change in OPEC’s composition, impacting its future production dynamics and geopolitical balance.

In late 2016, OPEC and major non‑OPEC oil producers—including Russia, Mexico, and other states—formed a larger coalition known as “OPEC+” to coordinate production cuts and enhance influence over global oil markets. The alliance represented a strategic shift, reflecting globalization of oil policy coordination beyond OPEC’s traditional membership.

Around the early 2000s, OPEC’s economic and political influence re-emerged as unity among members improved and cooperation with non‑OPEC producers (such as Russia, Mexico, and Norway) strengthened. Combined with geopolitical tensions and energy demand growth, this restored OPEC’s ability to influence global oil prices after a decade of diminished impact.

Following Iraq’s invasion of Kuwait on August 2, 1990, oil markets became destabilized. Saudi Arabia responded by increasing its oil production to stabilize supplies and prices, while OPEC members’ unity was tested. The conflict, a confrontation between two OPEC members, underscored geopolitical risks within the organization and its critical role in global energy security.

In the early 1980s, global demand for energy slumped, leading to an oversupply of oil and a collapse in prices by 1986. OPEC members suffered a drastic decline in petroleum revenues—some lost up to four‑fifths of their income—highlighting vulnerabilities in cartel cohesion and pricing power. This crisis prompted shifts in OPEC strategy toward protecting market share rather than prices, fundamentally changing its operating dynamics.

On January 28, 1976, the OPEC Fund for International Development was formally established, following its conception at the 1975 Algiers summit. The institution was created as an intergovernmental development finance agency, headquartered in Vienna, to provide grant and loan assistance to developing countries. It reaffirmed OPEC’s commitment to economic solidarity and expanded its global role beyond oil market coordination to international development finance.

In March 1975, OPEC convened its first Summit of Heads of State and Government in Algiers, where underdeveloped countries’ solidarity and global economic development were emphasized. The summit produced a “Solemn Declaration” promoting cooperation between developing nations and led to the creation of the OPEC Special Fund, intended to provide financial assistance to poorer countries and expand OPEC’s remit beyond petroleum regulation into development finance.

In October 1973, amid the Yom Kippur War, Arab members of OPEC enacted an oil embargo and dramatic production cuts against the United States and other Western nations supporting Israel. Prices surged, oil supply tightened, and widespread fuel shortages ensued. The ensuing energy crisis triggered economic recession, inflation, and a global shift in energy policy, marking OPEC’s first major assertion of power on the world stage.

OPEC established its first headquarters in Geneva upon its founding but relocated to Vienna, Austria, on September 1, 1965. The move aimed to gain full diplomatic privileges and solidify its international institutional presence. Vienna has since served as the central hub for OPEC’s Secretariat and key decision-making operations, establishing the city as the organization's long-standing administrative and diplomatic center.

The Organization of the Petroleum Exporting Countries (OPEC) was founded during a conference held in Baghdad, Iraq, from September 10 to 14, 1960. Representatives of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela established the organization to coordinate petroleum policies and counter the dominance of Western oil companies known as the “Seven Sisters.” This founding marked a pivotal shift in global oil governance, empowering exporting nations to exert greater control over pricing and production terms, laying the groundwork for OPEC’s growing geopolitical influence. It was formally constituted in January 1961. Sources vary on the exact founding date—with some sources citing September 14 as the key day in Baghdad. This event signaled a move toward resource sovereignty and transformed the structure of international energy politics.