OPEC and OPEC+ explained: how producer decisions move oil prices

OPEC, the Organization of the Petroleum Exporting Countries, is a group of oil-producing states that coordinate how much crude they pump. Since 2016 it has worked with Russia and other non-member producers in a wider alliance known as OPEC+. By agreeing to raise or cut production targets, the group can change the supply outlook for the whole oil market, which is why its meetings are among the most closely watched events for oil traders. What moves prices, though, is rarely the decision itself; it is how far the decision differs from what traders already expected.

This guide explains how the group is organised, how its decisions reach the price of a Brent or WTI CFD, and what its history shows about the limits of its power. For the wider picture of the oil market, read oil trading explained; for the two benchmarks, see Brent vs WTI.

What OPEC is

OPEC was founded at a conference in Baghdad in September 1960 by five countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its secretariat moved from Geneva to Vienna in 1965 and has been there since. Its stated aim is to coordinate members' petroleum policies to secure stable prices for producers and a steady supply for consumers.

Membership has changed many times. Several countries have joined, left and in some cases rejoined. In recent years Qatar left at the start of 2019, Ecuador at the start of 2020 and Angola at the start of 2024. On 28 April 2026 the United Arab Emirates announced that it would leave both OPEC and OPEC+ with effect from 1 May 2026, a significant departure, as the UAE had been one of the group's larger producers and one of the few with substantial spare capacity. Reports after the exit put membership at 11 countries: Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia and Venezuela. Check OPEC's own website for the current list, as it can change.

Saudi Arabia is the group's largest producer and its de facto leader, partly because it holds much of the world's spare production capacity: oil it could bring to market quickly if it chose to.

What OPEC+ is

In late 2016, after two years of low prices, OPEC agreed with a group of non-member producers, led by Russia, to cut output together. The arrangement, signed on 10 December 2016, is called the Declaration of Cooperation, and the combined group is widely known as OPEC+. Non-OPEC participants have included Russia, Kazakhstan, Mexico, Oman, Azerbaijan, Malaysia, Bahrain, Brunei, Sudan and South Sudan, though the list and the level of participation have varied.

OPEC+ matters more for prices than OPEC alone, because adding Russia brings in one of the world's three largest producers. Its decisions are usually reported as OPEC+ decisions, and that is the framing most traders mean when they talk about "OPEC".

How decisions are made

Meetings

• Ministerial meetings. Oil ministers of the full OPEC+ group meet periodically, often twice a year, sometimes in person in Vienna and often by video link. These set the overall production policy.
• Monitoring committee. A Joint Ministerial Monitoring Committee (JMMC) reviews market conditions and compliance between ministerial meetings, typically every two months. It can recommend changes but does not normally set policy on its own.
• Smaller groups. Since 2023 a subset of members that made additional voluntary cuts has met separately, often monthly, to decide how fast to reverse them. Decisions by this smaller group have frequently moved prices more than the full meetings.

Meeting dates are published on OPEC's website and in financial news calendars, but they can be moved, extended or brought forward, and extra meetings can be called at short notice.

Production targets and quotas

The group sets a total production target and divides it among members as individual quotas, measured against agreed reference levels. Countries exempt from cuts for political or security reasons, such as Iran, Libya and Venezuela at various times, are left outside the quota system.

Three details matter more than the headline number:

1. Compliance. Some members routinely produce above their quotas. The group has used "compensation" schedules, in which over-producers promise extra cuts later.
2. Spare capacity versus paper cuts. If a member is already producing below its quota because of underinvestment or outages, a cut to its quota changes nothing physically.
3. Secondary sources. Because members' own figures are not always relied on, OPEC also publishes production estimates based on independent "secondary sources" such as price agencies and consultancies.

Monthly reports

OPEC publishes a Monthly Oil Market Report with its estimates of supply, demand and production by member. Traders compare it with the International Energy Agency's monthly report and the US Energy Information Administration's Short-Term Energy Outlook. Large revisions to demand forecasts can move prices, but less than meeting decisions do.

How OPEC decisions affect oil prices

Expectations are everything

By the time ministers meet, news agencies have usually reported what delegates expect, often citing unnamed sources, and analysts have published forecasts. The price before the meeting reflects that consensus. So:

• A cut that matches expectations may barely move price, or price may fall as traders who bought in anticipation take profits ("buy the rumour, sell the fact").
• A larger-than-expected cut, or a surprise cut, can push prices up sharply.
• A smaller cut, a delay, or a sign of disagreement can push prices down, even though supply is being reduced.
• Leaks and reports in the days beforehand often move the market more than the formal announcement.

This is the same logic that applies to central bank meetings, covered in central banks and interest rates.

Worked example: a cut that is smaller than it sounds

The figures below are illustrative.

OPEC+ announces a cut of 2.0 million barrels per day (mb/d) to members' targets. Read in isolation, that is about 2% of global supply. But suppose several members whose quotas are cut are already producing a combined 0.8 mb/d below their old targets. For them, the new quota is at or above what they actually pump, so they do not need to cut anything. The real reduction in supply is closer to 2.0 − 0.8 = 1.2 mb/d. If other members do not fully comply, the physical effect is smaller still.

Analysts make this calculation within hours of an announcement, and the price adjusts to the effective cut, not the headline. When a headline cut seems to move the market less than its size suggests, this is often why.

Weekend decisions and gaps

OPEC+ meetings and announcements have sometimes taken place on weekends, when CFD markets are closed. In April 2023, for example, several members announced surprise voluntary cuts on a Sunday, and oil prices jumped by several percent when trading resumed on Monday. A position held through such an announcement can open far from Friday's close, and a stop loss is filled at the first available price, not at its level. The gap risk and weekend risk guide explains the mechanics.

What history shows

OPEC's influence is real but limited, and its history shows both sides. These episodes are well documented.

1973: the oil embargo

In October 1973, during the Yom Kippur War, Arab oil producers announced production cuts and an embargo on the United States and some other countries that supported Israel. Oil prices roughly quadrupled over the following months. This was the moment that established OPEC, and especially its Gulf members, as a force in the world economy.

1986: the price collapse

In the early 1980s Saudi Arabia cut its own production repeatedly to defend prices while other members exceeded their quotas and non-OPEC supply grew. In 1985–86 it abandoned that role and raised output, and prices collapsed. The episode showed that a producer group cannot hold prices up indefinitely if members do not share the burden.

2014 to 2016: the market share fight

As US shale output surged, oil prices fell sharply in the second half of 2014. At its November 2014 meeting OPEC decided not to cut production, choosing to defend market share instead. Brent fell from above $100 a barrel in mid-2014 to below $30 in early 2016. The pain for producers' budgets led directly to the OPEC+ alliance and the coordinated cuts agreed in late 2016.

2020: price war and record cut

In early March 2020, as the pandemic hit demand, OPEC+ failed to agree on deeper cuts after Russia declined to join. Saudi Arabia responded by cutting its selling prices and announcing higher output, and oil suffered one of its largest one-day falls on record on 9 March 2020. In April, the group agreed the largest coordinated cut in its history, 9.7 mb/d for May and June 2020, to be tapered over the following two years. The cut could not prevent the extreme moves of April 2020, including the negative settlement of the expiring WTI contract, because the collapse in demand was larger still.

2022 to 2025: cuts, voluntary cuts and their reversal

In October 2022 OPEC+ agreed a cut of 2 mb/d to its targets. In 2023 a subgroup added voluntary cuts on top, including the surprise April 2023 announcement and a separate unilateral cut by Saudi Arabia. In 2025 a group of eight members began reversing those voluntary cuts, at a pace that surprised much of the market. Each step was reported, debated and sometimes leaked in advance, and the price reaction depended on how each decision compared with expectations.

2026: the UAE's exit

The UAE's departure with effect from 1 May 2026 removed a large producer, with plans to expand its capacity, from the group's quota system. How much that changes OPEC+'s ability to manage supply is something the market will judge over time; this guide does not attempt to forecast it.

The pattern

Across these episodes, OPEC and OPEC+ have been able to move prices sharply in the short run and to support them for periods when members cooperate and demand is steady. They have not been able to hold prices against a collapse in demand, against rapid growth in non-member supply such as US shale, or when members disagree. Treat any claim that "OPEC will defend $X" as an opinion, not a rule.

OPEC, oil and currencies

Oil prices feed into inflation, trade balances and growth expectations, so OPEC+ decisions can ripple into forex. Currencies of oil exporters, such as the Canadian dollar and Norwegian krone, have historically shown some sensitivity to oil, as discussed in the USD/CAD pair profile. Higher oil prices can also add to inflation in importing economies, which matters for central bank expectations; see inflation and currencies. These links are real but inconsistent.

Trading oil CFDs around OPEC+ events

Before the meeting

• Put the dates in your calendar. OPEC publishes meeting dates, and economic calendars list them. The approach in how to use an economic calendar applies.
• Know what is expected. Read the pre-meeting reports so you know what is priced in.
• Decide deliberately whether to hold through. Holding is a choice to accept event risk, not something that should happen by default.
• Check for weekends. If a meeting or a decision by a subgroup falls on a Saturday or Sunday, Monday's open can gap.

Sizing for the event

Leverage on oil CFDs is capped at 10:1 for retail clients in the EU and UK (see ESMA leverage limits and negative balance protection), but the cap tells you the most you can borrow, not what is sensible over an event.

Worked example: holding a short through a weekend meeting

The numbers below are illustrative, not current prices. The contract is a Brent CFD of 100 barrels per contract, so a $1 move is worth $100 per contract.

You have a $10,000 account and risk 1% per trade, $100. On Friday you sell 0.6 contracts at $80.00 with a stop at $81.50, $1.50 away. Planned loss at the stop: 1.50 × $100 × 0.6 = $90.

Over the weekend, OPEC+ announces an unexpected extra cut. Brent opens on Monday at $84.00. Your stop is triggered at the open and filled near $84.00. The loss is (84.00 − 80.00) × $100 × 0.6 = $240, more than two and a half times the plan and 2.4% of the account.

Had you sized for a possible $4 gap instead of the $1.50 stop, you would have traded $100 ÷ ($4 × $100) = 0.25 contracts, rounded down to 0.2, and the same gap would have cost $80. The instruments position size calculator helps with this kind of arithmetic. Some providers sell stop orders that cap the exit price, for a fee and on certain markets only; check the terms and costs if you consider them.

After the announcement

• Spreads widen. Expect wider spreads on oil CFDs for minutes to hours after a surprise. The guide to why spreads widen explains why.
• First moves can reverse. The initial reaction to a headline sometimes reverses once analysts work out the effective cut, as in the worked example above.
• Watch the follow-through data. Over the following months, secondary-source production estimates show whether members actually delivered.

Common mistakes

• Trading the headline number. The size of the cut matters less than how it compares with expectations and how much of it is real.
• Assuming a cut means higher prices. A cut smaller than expected, or one already priced in, can be followed by falling prices.
• Ignoring meeting dates. Being caught by a scheduled event is avoidable.
• Holding full size over a weekend meeting. Gaps can exceed a normal stop distance several times over.
• Treating OPEC as all-powerful. History shows it can be overwhelmed by demand shocks and non-member supply.
• Relying on old membership lists. Members join and leave; the UAE's 2026 exit changed the group's makeup.

Most retail CFD accounts lose money, and event-driven markets such as oil make the effect of leverage more severe. See the risk warning for more.

Frequently asked questions

What is the difference between OPEC and OPEC+?

OPEC is the organisation of oil-exporting countries founded in 1960. OPEC+ is the wider alliance formed in December 2016 under the Declaration of Cooperation, which adds Russia and other non-member producers. Most production decisions that move oil prices today are OPEC+ decisions.

How many countries are in OPEC?

After the UAE's exit on 1 May 2026, reports put membership at 11: Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia and Venezuela. Membership changes over time, so check OPEC's website for the current list.

How often does OPEC+ meet?

Ministers of the full group usually meet a couple of times a year, a monitoring committee meets roughly every two months, and a smaller group of members with voluntary cuts has often met monthly. Extra meetings can be called at short notice, and dates can be moved.

Why does oil sometimes fall after OPEC+ announces a cut?

Because the market had expected a larger cut, because the cut was already priced in, or because analysts conclude that the effective reduction is small once members producing below quota and weak compliance are taken into account.

Does OPEC control the oil price?

No. It can influence prices strongly, especially in the short run, but history shows it cannot hold prices up against a collapse in demand, rapid growth in non-member supply or disagreement among its own members, as in 1986, 2014–16 and early 2020.

How should I manage risk on oil CFDs around OPEC+ meetings?

Know the dates and the consensus, decide deliberately whether to hold through, and size the position for a possible gap rather than only for the stop distance. Expect wider spreads around announcements and remember that stops can be filled well away from their level.