OPEC members broke 96 percent of their production promises, one study found
OPEC is the textbook cartel: agree to pump less, and everyone earns more. The catch is that each member profits most by quietly pumping extra. A political scientist who tracked commitments from 1982 to 2009 concluded members cheated on nearly all of them, and the group never punished anyone.
Five countries founded the Organization of the Petroleum Exporting Countries in Baghdad on 14 September 1960: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Eleven belong today, including Algeria, Nigeria and Libya, while Ecuador, Indonesia and Qatar are among those that have left; the United Arab Emirates quit both OPEC and the wider OPEC+ grouping in 2026. OPEC+ itself formed in late 2016, adding other producers in an effort to steer the crude market. In 2022 OPEC members pumped 38 percent of the world's oil, and they are estimated to hold about 79.5 percent of proven reserves.
The group's historic achievement came early. Before 1960, producing states that tried to change the rules of oil extraction on their soil were punished. In 1953 the United States and Britain backed a coup against Iran's Mohammad Mosaddegh after his government nationalised oil, and the dominant Anglo-American firms known as the Seven Sisters could squeeze a defiant country by slowing output there and raising it elsewhere. Acting together, OPEC states could nationalise production and set prices in their own favour without that retaliation, a shift toward national control of natural resources.
In the 1970s production cuts sent prices soaring, with consequences that rippled through the global economy for years. Economists have since held OPEC up as the classic example of producers cooperating to suppress competition and capture monopoly profits.
Its power since the 1980s is far more doubtful. Jeff Colgan argues that the cartel largely failed to limit supply, steady prices or lift long-run revenues. The underlying problem is a collective-action trap: restraint benefits the group while overproduction benefits the individual. Where members do honour quotas, Colgan finds, it is usually because the quota matches what they would have produced anyway.
Source: OPEC
