Every few weeks, ministers from some of the world's largest oil-producing countries meet, sometimes in Vienna and often by video call, and decide how much crude they are prepared to pump. The outcome can move oil prices by several percent in minutes, ripple through inflation expectations and shift energy shares on the FTSE 100. For anyone trading commodities, or simply trying to understand why petrol prices change, OPEC+ is essential context.
Who is in the group
OPEC, the Organization of the Petroleum Exporting Countries, was founded in 1960 and includes producers such as Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and others. In 2016 it formed a wider alliance with non-OPEC producers, most notably Russia, and that broader group is known as OPEC+. Together the alliance accounts for a large share of global crude supply.
Saudi Arabia is usually seen as the most influential member, because it has substantial spare capacity, the ability to raise or cut output relatively quickly. Spare capacity is the group's main lever on the market.
How the group influences price
OPEC+ does not set the oil price. Prices are discovered in futures markets such as Brent and West Texas Intermediate. What the group does is influence the balance between supply and demand, and therefore the expectations those futures markets trade on.
The tools are mainly production targets. The group can agree to cut output to support prices when demand looks weak, or raise output when prices are high and members want to win market share or ease pressure from consuming countries. Some members also announce voluntary cuts on top of group-wide agreements.
Markets react to three things: the decision itself, how it compares with expectations, and whether members are likely to comply. A large cut that was already expected may barely move the price. A small surprise can move it sharply. Compliance matters because some members have historically produced more than their quotas.
Why the headline is not the whole story
Beginners often watch the announced numbers and nothing else. More experienced traders also look at:
- Spare capacity, because a group with little room to raise output has less power to cap prices.
- Non-OPEC supply, particularly US shale, which can respond to higher prices over time.
- Demand signals, such as Chinese imports and global manufacturing data.
- Geopolitical risk, including shipping routes like the Strait of Hormuz. Our guide to the Strait of Hormuz explains why that waterway matters.
- Emergency stocks, because coordinated releases by consuming nations can offset some of the group's influence.
The futures curve also tells a story. If near-dated contracts trade well above later ones, the market is pricing tight supply now. Our beginner's explainer on contango in oil futures covers the opposite shape and what it implies.
Brent, WTI and the UK angle
OPEC+ decisions tend to affect Brent, the international benchmark, and WTI, the US benchmark, in the same direction, but not always by the same amount. The gap between them can widen or narrow depending on transport costs, US inventories and where the supply change is felt most. We cover that relationship in the Brent–WTI spread for beginners.
For UK traders, the effects reach well beyond the crude chart. Energy majors carry a large weight in the FTSE 100, so their shares often respond to OPEC+ news. Higher oil can feed into UK inflation through fuel and transport costs, which in turn shapes expectations for the Bank of England. Airlines, chemicals companies and consumer stocks can feel the cost side of the same move.
Trading around meeting days
Meeting days can be noisy. Headlines from delegates and sources often leak in the days beforehand, and prices can move on rumours that turn out to be wrong. A sensible approach is to note the consensus expectation, keep position sizes modest into the decision, and wait for the official statement before treating any move as settled.
It also helps to separate the immediate reaction from the trend. Oil markets often digest an OPEC+ decision over days or weeks as traders assess compliance and demand. The first hour is rarely the final verdict.
Keeping perspective
OPEC+ is powerful, but it is one force among several. Demand shocks, recessions, technology and politics have repeatedly overwhelmed the group's intentions. Treat its decisions as an important input, not a guarantee of where prices will go.
If you would like to understand how prepared you are to trade event-driven markets like oil, our free trader assessment can help you identify the gaps.
