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OPEC
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OPEC

12-member oil cartel; Q2 2026 Brent collapsed 30% despite successive production-increase approvals.

OPEC lost the UAE as a member on 1 May 2026, the day its 5 million barrels a day of capacity moved outside the group's quota discipline and left Saudi Arabia as the sole anchor of the group's spare-capacity buffer.

Last refreshed: 3 August 2026 · Appears in 3 active topics

Key Question

Can OPEC remain a credible price setter after losing the UAE's spare capacity?

Timeline for OPEC

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Background

OPEC, the Organization of the Petroleum Exporting Countries, was founded in Baghdad in September 1960 and is headquartered in Vienna. It now has 12 member states following the UAE's departure on 1 May 2026, and together with the wider OPEC+ grouping accounts for roughly 40% of world crude output, OPEC alone for around 30%.

Saudi Arabia has always held de facto leadership within the group, but the UAE's exit removed the only other Gulf producer capable of acting as a second swing-capacity buffer, making OPEC's production discipline more dependent than before on Riyadh's own willingness and ability to absorb market shocks. That dependence is sharpened by Saudi Arabia's own fiscal breakeven oil price of $108-111 a barrel, well above where Brent has traded through much of 2026, meaning the kingdom is often approving output increases it needs for revenue rather than ones the market is asking for.

Key Issues
Cartel cohesion

Saudi Arabia carries OPEC alone now

Seven OPEC+ members approved a 188,000-barrel-a-day hike for June on 3 May, the first vote taken after the UAE's 1 May exit, and a FAR smaller increment than the 411,000-barrel unwinds OPEC+ had approved in April and May. Losing the UAE's quota-defying spare capacity leaves Saudi Arabia as the group's sole anchor for steadying the Brent forward curve, with no second Gulf producer able to absorb a shortfall if Riyadh cannot deliver.

A 2 August release from the OPEC Secretariat itself, retrieved verbatim, recorded seven countries agreeing a further 188,000-barrel-a-day adjustment for September, with the next meeting set for 6 September; it carried no mention of any fourth-quarter pause, correcting an earlier report that had sourced an eight-country subgroup to delegates rather than to the Secretariat's own communique. That seven-country group manages monthly voluntary adjustments and should not be read as a statement about total OPEC+ membership or output policy.

Common Questions
What is OPEC doing about Saudi Arabia's budget deficit in 2026?
Nothing directly. Saudi Arabia's fiscal breakeven is $108-111/barrel; Brent settled at $72.91 on 30 June 2026, leaving Riyadh under extreme negative carry. OPEC+ voted successive 188,000 bpd monthly increases it structurally cannot deliver, since actual group output collapsed 9.58 mbd from February levels due to Hormuz disruption.Source: OPEC secretariat / Goldman Sachs
Why did oil prices fall 30% in Q2 2026?
Brent Crude fell roughly 30% from Q2 2026 open to settle at $72.91 by 30 June, as markets priced in the easing of Hormuz supply-risk alongside OPEC+'s successive production-increase approvals. The verbal US-Iran stand-down on 29 June added only +1.3% on the day, suggesting most of the war-risk premium had already been unwound.Source: Lowdown / Brent market data
How will the UAE leaving OPEC affect oil prices?
With the UAE's 5 million Barrels Per Day now outside OPEC+ quota discipline, Saudi Arabia faces pressure to decide whether to lift its own production to compensate or defend the cartel framework. Brent hit $123/barrel settle on 30 April — 87% above pre-war — as markets priced the supply uncertainty.Source: editorial
How many countries are in OPEC after the UAE left?
After the UAE's departure effective 1 May 2026, OPEC has 12 member states. The UAE was a founding Gulf pillar with the highest declared spare capacity of any cartel member.Source: editorial
Why did the UAE leave OPEC?
The UAE withdrew from OPEC and OPEC+ effective 1 May 2026 after years of quota disputes, citing unwillingness to subordinate its 5 million Barrels Per Day of capacity to cartel coordination. The structural backstory is the Saudi strike on a UAE convoy at Mukalla port in December 2025.Source: editorial
How much has OPEC cut its 2026 oil demand growth forecast?
OPEC's July 2026 Monthly Oil Market Report cut its 2026 global demand growth forecast for a fourth consecutive month, down to just +0.8 million barrels a day, extending a run of successive downgrades through the summer.Source: OPEC Monthly Oil Market Report, July 2026
What is the difference between OPEC and OPEC+?
OPEC is the core 12-nation cartel controlling around 30% of global crude output. OPEC+ is the broader compact including Russia and nine other non-OPEC producers, covering roughly 40% of global supply. Coordination in both depends on voluntary quota compliance.Source: editorial
When was OPEC founded and where is it based?
OPEC was founded in Baghdad in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Its headquarters moved to Vienna, Austria in 1965, where it remains.Source: editorial
Did OPEC meet on production quotas in August 2026?
Yes. Russian Deputy Prime Minister Alexander Novak, representing OPEC+, chaired OPEC's 67th Joint Ministerial Monitoring Committee on 2 August 2026, the body that reviews members' output compliance.Source: Government of the Russian Federation
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