Opec's Fading Grip on Global Energy Markets

The Organization of Petroleum Exporting Countries (Opec) was formed in 1960 as a response to Standard Oil's unilateral price cuts, which led to an increase in Soviet oil exports and reduced prices for West Asian crude. The five major producers - Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela - sought to regulate oil output and ensure price stability.

Opec has wielded significant influence over the global energy market, but its authority has been eroded by emerging non-Opec supplies and US shale flows. In 2016, Opec members agreed to cut production by 1.2 million barrels per day in an effort to arrest plummeting prices. The agreement marked a shift towards cooperation between Opec and non-Opec producers.

However, Opec's dominance has been threatened by the rise of new oil-producing nations and regions, including South America and the Caribbean. Many Opec members have sought to maintain their market share by investing in long-term oil infrastructure projects and forming partnerships with other countries, such as China.