What Is OPEC?

India imports nearly 85% of the crude oil that it consumes and its prices are controlled by a cartel of crude oil-producing countries, known as OPEC.

In India, oil prices move markets, affect inflation, influence government finances and even impact household budgets. Hence, OPEC’s decisions can indirectly affect your finances. But what exactly is OPEC, how does it work and why does it matter to India? Let's understand.

What Is OPEC?

OPEC is an acronym for the Organisation of the Petroleum Exporting Countries. It is an organisation that brings together governments of the world’s largest oil-exporting nations. The group's main objective is to coordinate petroleum policies among member countries and promote stability in global oil markets.

OPEC was founded in 1960 and continues to play an important role in the global energy industry. As of June 2026, it is headquartered in Vienna, Austria.

Because many member countries produce large volumes of crude oil, OPEC's production decisions can influence global oil supply and, in turn, oil prices.

Why Was OPEC Created?

Before OPEC was formed, international oil companies (largely from the West) had significant influence over oil pricing. Many oil-producing countries felt they had limited control over their own natural resources and revenues. So, to strengthen their bargaining power, five countries came together in September 1960 at the Baghdad Conference.

These founding members of OPEC were,

• Iran
• Iraq
• Kuwait
• Saudi Arabia
• Venezuela

Their goal was to coordinate prices and supply the oil they produce and protect the interests of oil-producing nations. Over time, OPEC evolved into one of the most influential organisations in the global energy market.

OPEC Through the Years

Who Are the Members of OPEC in 2026?

Following the UAE's withdrawal in May 2026, OPEC has 11 member countries: Algeria Congo Equatorial Guinea Gabon Iran Iraq Kuwait Libya Nigeria Saudi Arabia Venezuela

Most OPEC members are located in the Middle East and Africa, except for Venezuela from South America.

Together, these countries hold a large share of the world's proven oil reserves.

What Is OPEC+?

Many people confuse OPEC with OPEC+. They are not the same thing. OPEC consists only of member countries. OPEC+ is a broader cooperation framework that includes OPEC members along with major non-OPEC oil producers such as Russia and several other countries.

The purpose of OPEC+ is to coordinate production levels more effectively and influence the balance between global oil supply and demand.

Because of possible changes in partnership agreements, OPEC+ is best understood as an alliance rather than a fixed-membership organisation like OPEC.

How Does OPEC Influence Oil Prices?

Oil prices are largely determined by supply and demand. OPEC influences prices mainly by adjusting production levels. When member countries produce less, global oil supply can tighten. In this scenario, if demand remains strong, prices may rise. When production increases, more oil enters the market. If supply grows faster than demand, prices may fall. Of course, OPEC is not the only factor affecting oil prices. Geopolitical events, wars, economic growth, sanctions, weather disruptions and production from countries such as the United States also play important roles. Still, OPEC announcements are closely watched because they can affect expectations about future supply.

Why Does OPEC Matter to India?

India is one of the world's largest oil-consuming countries and imports most of the crude oil it uses.As a result, changes in global oil prices can have a significant impact on the Indian economy.

• Fuel Prices - Higher crude oil prices can increase the cost of petrol, diesel, and other petroleum products.
• Inflation - Oil is used in transportation, manufacturing, and logistics. Rising oil prices can increase costs across the economy and contribute to inflation.
• Trade Deficit - India imports large quantities of crude oil. Higher oil prices generally increase the country's import bill.
• Government Finances - Oil prices can influence tax collections, subsidies and overall fiscal planning.
• Financial Markets - Movements in crude oil prices often affect sectors such as aviation, paints, chemicals, logistics and energy.

How OPEC Decisions Affect Indian Investors

OPEC decisions influence crude oil prices and that often affects the earnings of almost all large and small Indian companies. Although the impact varies across sectors, some broad trends have followed, Oil producers may benefit from higher crude prices. Companies such as ONGC and Oil India earn more when oil prices rise because the crude they produce can be sold at higher prices.

Refiners and energy companies may see mixed effects. For companies such as Reliance Industries, Indian Oil Corporation, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL), the impact depends on refining margins, fuel demand, and government policies rather than oil prices alone.

Fuel-intensive businesses often prefer lower oil prices. Airlines such as IndiGo, logistics companies, and transportation businesses usually benefit when fuel costs decline and vice versa. Paint and chemical companies are also affected. Firms such as Asian Paints, Berger Paints, Pidilite Industries, and many chemical manufacturers use crude-oil derivatives as raw materials. Lower oil prices can help reduce input costs and support profit margins

An Afterthought - Is OPEC Still Powerful Today?

OPEC remains one of the most influential organisations in global energy markets, but the industry has changed significantly over the decades.

The rise of US shale oil production, renewable energy investments, electric vehicles, and new sources of supply has reduced OPEC's ability to control prices on its own. This is one reason why cooperation with non-OPEC producers through OPEC+ became increasingly important. Even so, markets continue to react strongly to OPEC and OPEC+ production decisions because they influence expectations about future oil supply.

Frequently Asked Questions

How often does OPEC meet and where?

OPEC holds two formal meetings every year, usually in June and November, in Vienna, Austria. OPEC+ meets more often. Emergency meetings can be called anytime, as happened during COVID-19 in 2020.

Who is the current Secretary General of OPEC?

As of June 2026, Haitham Al Ghais from Kuwait has been OPEC's Secretary General since August 2022. He took over from Nigeria's Mohammad Barkindo and has led the group through some very turbulent years for oil markets.

Does OPEC actually force countries to follow production limits?

OPEC has no legal power to punish members who pump more than their agreed limit. Countries like Iraq and Kazakhstan have repeatedly broken their quotas. OPEC runs entirely on trust and collective self-interest.

Which OPEC country has the most oil?

As of June 2026, Venezuela, with around 303 billion barrels has most of oil, more than Saudi Arabia's 267 billion. But Venezuela's production has collapsed due to its economic and political crisis, so Saudi Arabia remains the most powerful player inside OPEC in practice.

What is the OPEC Fund for International Development?

It is a separate development fund set up by OPEC members in 1976, also based in Vienna. It gives loans and grants to poorer non-OPEC countries for schools, hospitals, roads, and farms. It has committed over $25 billion since it was founded and is completely separate from OPEC's oil decisions.

What is the difference between Brent crude and WTI, and which does OPEC use?

Brent crude comes from the North Sea and is the global standard for pricing oil. Most OPEC exports are priced against it. WTI is the American version, used to price US oil. OPEC actually uses its own measure called the OPEC Reference Basket, which averages crude prices across its member countries and trades close to Brent.