how the opec influences oil prices
collectively opec is the largest producer and exporter of crude oil and petroleum products in the world roughly 40 of the world s oil production and 60 of the world s petroleum market come from the group s member countries and they accounted for more than 80 of the world s proven oil reserves in 2021 14having said this it s no surprise that any moves the group makes have a big impact on global energy prices oil prices can drop significantly if they decide to supply more oil to the market on the other hand if opec member countries decide to cut production and curb supplies prices are highly likely to shoot up advantages and disadvantages of the opecthere are several advantages of having a cartel like opec operating in the crude oil industry first it promotes cooperation among member nations helping them alleviate some degree of political hostilities and because the organization s main goal is to stabilize oil production and prices it is able to exert some influence over production from other nations opec s influence on the market has been widely criticized because its member countries hold the vast majority of crude oil reserves the organization has considerable power in these markets 13 as a cartel opec members have a strong incentive to keep oil prices as high as possible while maintaining their shares of the global market promotes cooperation among member nationsexerts influence over production from other nations