has considerable power
incentivized to keep oil prices high to maintain global market shareopec challenges and responsesoil prices and opec s role in the international petroleum market are subject to a number of different factors the advent of new technology especially fracking in the united states has had a major effect on worldwide oil prices and has lessened opec s influence on the markets as a result worldwide oil production increased and prices dropped significantly leaving opec in a delicate position opec decided to maintain high production levels and consequently low prices as of mid 2016 in an attempt to push higher cost producers out of the market and regain market share however starting in january 2019 opec reduced output by 1 2 million barrels a day for six months due to a concern that an economic slowdown would create a supply glut extending the agreement for an additional nine months in july 2019 15demand for oil dropped during the global crisis which began in 2020 producers had an overabundance in supply with no place to store it as the world experienced lockdowns cutting down demand this along with a price war between russia and saudi arabia led to a drop in oil prices as a result the organization decided to cut production by 9 7 million barrels per day between may and july 2020 16 oil prices continued to experience volatility leading opec to adjust production levels to 7 2 million barrels per day as of january 2021 17opec faces considerable challenges from innovation and new green technology high oil prices are causing some oil importing countries to look to unconventional and cleaner sources of energy these alternatives such as shale production as an alternative energy source and hybrid and electric cars that reduce the dependence on petroleum products continue to put pressure on the organization opec opec is a group that comprises the 13 member countries of opec and other oil producing countries these countries include azerbaijan bahrain brunei equatorial guinea kazakhstan russia mexico malaysia south sudan sudan and oman 18this group was established in 2016 a time when the economy was seeing significantly low oil prices the purpose was to help bring stability to the global market together opec nations boast 90 of the world s oil reserves 1918