Context: The global economy, grappling with the COVID-19 pandemic, is now faced with an energy war, resulting in crashing of crude oil prices in the international market.
- The Organisation of the Petroleum Exporting Countries (OPEC) and its alliance partners failed to reach any consensus on cutting back production to levels in order to keep prices stable.
- The U.S., as the largest oil producer today, has stayed away from the OPEC-plus arrangement,in a hope that production cuts by OPEC-plus countries will lead to increase its market share.
It is a permanent, intergovernmental organization, headquartered in Vienna, Austria.
- Founder Members: The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
- Currently, the Organization has a total of 14 Member Countries.
- OPEC’s objective is
- to coordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers;
- an efficient, economic and regular supply of petroleum to consuming nations; and
- a fair return on capital to those investing in the industry.
- OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
- OPEC+ refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017.
- OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
- The Opec and non-Opec producers first formed the alliance at a historic meeting in Algiers in 2016.
- The aim was to undertake production restrictions to help revive a swinging market.
Nord Stream 2
- It is a gas pipeline project with a purpose to bring Russian gas under the Baltic Sea direct to Germany.
- The decision to build Nord Stream 2 was taken after the success of building and operating the first Nord Stream gas pipeline.
- It will also facilitate reliable supply of Russian gas to Europe.