OPEC started back in 1960. Legend has it that five oil ministers showed up in Baghdad because they were fed up. Saudi Arabia, Iran, Iraq, Kuwait and Venezuela were all watching foreign oil companies set prices that barely covered their costs. The story goes that the oil they were selling was worth less than the tea on the table during the meeting. Whether or not that part is true, the frustration was real. None of them had a detailed blueprint. What they did have was a shared sense that they were losing control over their own resources.
Out of that frustration, plus some big ambitions, the group formed. It was something new: part cartel, part political alliance and part protest movement against Western oil majors that had dominated the industry since the early 20th century. OPEC was less about technical coordination at first and more about asserting sovereignty over oil itself.
Nobody paid much attention in the beginning. The major oil companies laughed it off, traders ignored it, and even the members treated production limits as optional. Rules on output existed on paper, but enforcement was weak-to-non-existent. For most of the 1960s, OPEC felt more like a talking shop than a force, issuing statements markets barely reacted to.
Every few years, there is a crisis that should kill OPEC
Then the 1970s hit, and things changed fast. Nationalisations of oil assets spread across OPEC countries, and the group suddenly controlled actual barrels, not just rhetoric. The Arab oil embargo and broader supply controls showed that constraining production could shake the entire global economy. Prices exploded, inflation surged and energy security became a top political issue in consuming countries. The IEA was formed in response, and OECD countries ensured they would hold 90 days of emergency oil stocks.
For a moment, it looked as if OPEC held the world hostage. That was also when people started predicting its collapse—ironically, right as its influence peaked. Internal tensions, competing national priorities and wild price swings made many assume the whole thing would burn out quickly.
But OPEC did not die. It evolved.
Crises and confidence
The 1980s brought the first real existential crisis. High prices had encouraged conservation, new non-OPEC supply, and a recession. Demand weakened, but members kept cheating on quotas, trying to defend revenue by pumping more. Saudi Arabia carried most of the burden, cutting its own output again and again to support prices.
Eventually, Riyadh gave up trying to be the swing producer alone. It opened the taps, flooded the market, and prices collapsed. Oil exporters were crushed, budgets blew up and OPEC looked finished. Analysts wrote its obituary with confidence. A cartel that cannot enforce discipline is not supposed to survive.
OPEC didn’t die. It evolved.
The organisation staggered through the 1990s, diminished but alive. Prices stayed relatively low and stable, and OPEC faded into the background of global markets. It still mattered on the margins, but it no longer felt decisive. For a while, it seemed as if it had become a legacy institution, kept alive by habit more than power.
Then the 2000s arrived. Demand from China and other emerging markets surged, spare capacity tightened, and suddenly OPEC mattered again. Prices climbed to levels not seen in decades. The group looked relevant, almost by accident, and even its members seemed surprised by how much leverage they had recovered.
That confidence did not last. Around 2014, the US shale boom changed the game. Hydraulic fracturing and horizontal drilling unlocked huge volumes of oil. Supply surged from outside OPEC’s control, and when the group refused to cut, prices crashed. Once again, the narrative was that OPEC had been beaten by technology.
OPEC did not die. It evolved.
By 2016, the strategy shifted. OPEC pulled off something it had never really done before: it formalised cooperation with non-members, most importantly Russia. OPEC+ was born. It was an uneasy alliance, stitched together by necessity rather than trust, but it worked. Production cuts were coordinated on a scale large enough to stabilise prices and restore some control over the market.
The fundamental mistake is to think of OPEC as an independent actor rather than as a response to an energy industry that requires the management, security and vision the organisation provides
Then came 2020. The pandemic wiped out demand almost overnight. Planes were grounded, roads were empty and storage filled up. Russia and Saudi Arabia had their first major falling out, and prices even went negative briefly. It felt unprecedented and final. Even long-time believers thought this time might actually be the end.
OPEC did not die. It evolved.
Against expectations, OPEC+ agreed to massive cuts, and—more surprisingly—largely complied with them. Coordination held under extreme stress. The group emerged smaller in confidence but intact, proving again that survival, not perfection, is the real objective. The group started to provide real oil market stability.
Now tensions are back. Disputes over baselines, quotas and future production plans have grown louder. Countries such as the UAE, with fast-growing capacity and big ambitions, have pushed back against constraints designed for a different era. Talk of exits or fragmentation resurfaces whenever national interests diverge too sharply. Angola and Qatar were high profile departures that wanted to focus on national oil and gas strategies respectively. But the UAE’s exit was next level.
Analysts rushed to explain why this time it is the end: from theories around peak oil, risk of stranded assets and potential fading relevance to changing geopolitical alliances. Every few years, there is a crisis that should kill OPEC. Analysts keep making the same mistake and creating the same headlines. This is often with good reason, but history shows OPEC does not disappear: it bends, shrinks, expands and rebrands. It is less a fixed organisation than a recurring response to chaos in oil markets. Tough times are not a defect in its story—they are the whole point.
The fundamental mistake is to think of OPEC as an independent actor rather than as a response to an energy industry that requires the management, security and vision the organisation provides.
Charles Darwin’s On the Origin of the Species debunked the creation story, and it is similarly important to understand how OPEC got to this point. And then the conclusion is obvious.
OPEC will not die. It will evolve.