OPEC

The influence of the Organization of the Petroleum Exporting Countries (OPEC) has diminished since the height of their influence in the 1970s and their contribution to the reverse oil price shock of 1986 (prices fell to less than $10/barrel from $30/barrel in 9 months as OPEC members abandoned production discipline³⁶). However, their

influence over world oil prices should not be summarily dismissed. OPEC continues to agree to a daily output ceiling (though it tends to be exceeded by as much as one million barrels per day) in an effort to keep prices near their target level. However, their production ceiling (24.52 mbpd as of this writing) has declined on a percentage basis of world oil trade. For example, as recently as 1991, total international trade in crude oil amounted to about 30 mbpd, of which OPEC produced about 21 million or 70%.³⁷ Today's daily figure is closer to 70 mbpd of which OPEC produces 25 million or 36%. The growth of oil production from non-OPEC countries, particularly emerg­ing market economies, has served to reduce their ability to influence oil prices through cartel behavior. Yet, their percentage production of world oil output is still substantial enough that periodic OPEC meetings continue to garner the market's attention.