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What Is OPEC+? An Overview of Key Members

OPEC+ refers to the 13 members of the Organization of Petroleum Exporting Countries (OPEC) and 11 other non-OPEC members. These nations came to an accord towards the end of 2016 “to institutionalize a framework for cooperation between OPEC and non-OPEC producing countries on a regular and sustainable basis.” These nations aim to work together on adjusting crude oil production to bring stability to the oil market.

OPEC holds 80.4% of the world’s proven oil reserves, while the set of 11 non-OPEC nations represent 9.7% of proven oil reserves. With 90% of the world’s proven crude oil reserves held by these nations, they have the capability to disrupt or enhance the supply of crude oil. The list of non-OPEC nations includes Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Russia, Mexico, Malaysia, South Sudan, Sudan and Oman.

Here’s an overview of the top five non-OPEC nations in terms of proven reserves.

1. Russia
Russia is the largest member of OPEC+ both in terms of proven oil reserves and GDP size. According to the BP Statistical Review of World Energy 2021 report, the country has 107.8 billion barrels of proven oil reserves. In 2021, Russia produced 10.78 million barrels daily. The country is categorized as an ‘upper middle income’ economy by the World Bank, and Russia’s three-decade long journey includes periods of hyperinflation, stagflation and strong economic growth.

According to the U.S. Energy Information Administration (EIA), Russia is the world’s third-largest producer of petroleum and other liquids behind the U.S. and Saudi Arabia. The country’s oil production is mainly controlled by domestic companies such as Rosneft, Lukoil, Surgutneftegas, Gazprom and Tatneft. Following the jolt to its economy in 2014, Russia began to work towards diversifying its economy to reduce dependence on oil and gas exports. Russian non-resource non-energy exports set a record of $193 billion in 2021, an increase of 37% over the previous year. Russia has set an ambitious target to increase the share of non-commodity and non-energy exports by at least 70% by 2030.

2. Kazakhstan
Kazakhstan has the second largest endowment of oil in Eurasia and the 12th largest in the world with 30,000 million barrels of proven oil reserves, which is equal to 1.7% of the world’s share. Kazakhstan produced 1.87 million barrels daily in 2021. The economy of Kazakhstan has seen significant progress in the past three decades since its emergence as an independent nation. GDP growth on the back of a combination of structural reforms, strong domestic demand, foreign direct investment (FDI) and large oil reserves have placed Kazakhstan’s economy in the category of an ‘upper middle income’ nation by the World Bank. The size of its economy, which was $2.87 billion in 1992, grew to $236.64 billion by 2013. The plunge in oil prices in 2014 negatively impacted its economy, which shrank to $137.29 billion by 2016. Kazakhstan’s GDP is expected to be $193.61 billion in 2022 and projected to be $279.85 billion by 2027. Tengiz and Karachaganak are the two biggest oil-producing fields in Kazakhstan, together producing almost half of its oil.

3. Azerbaijan
Azerbaijan has 7 billion barrels of proven oil reserves, which is equivalent to 0.4% of global share. In 2021, it produced 0.72 million barrels per day. Post-independence in 1991, Azerbaijan’s economy was devastated and by 1995, the country’s GDP was only 37% of what it had been in 1989. Gradually, Azerbaijan began to tap its oil potential by entering contracts and partnerships. The country signed the first major oil contract with international firms in 1994, and “the foreign direct investment surge and the construction of the Baku-Tbilisi-Ceyhan oil pipeline injected billions of dollars into the economy,” according to ADB. An annual economic growth of 10% between 1996 and 2005 resulted in a sharp decline in poverty from 68% in 1995 to 29% in 2005. The production and export of crude oil and natural gas are central to Azerbaijan’s economy, making its progress vulnerable to oil shocks. The GDP of Azerbaijan is projected to reach $80.08 billion by 2027. It is classified as an ‘upper middle income’ nation by the World Bank.

4. Mexico
Mexico, the second largest economy in Latin America, has 6.1 billion barrels of proven oil reserves. In 2021, Mexico produced 1.92 million barrels per day. Oil is a crucial component of its economy with more than 55% of the government revenue coming from the oil industry. Over the last three decades, Mexico has underperformed in terms of GDP growth as compared to its peers. Mexico’s economic growth averaged just above 2% a year between 1980 and 2018. The country’s economy is currently emerging from the downturn it underwent during 2019 and 2020 due to fall in oil prices and the pandemic. Mexico’s 2022 GDP is estimated at $1.32 trillion, and by 2027 it is expected to reach $1.65 trillion. Mexico is classified as an ‘upper middle income’ economy as per the World Bank. The country has strong trade ties with the U.S., with the latter being the top source of FDI in the country. The new United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020.

5. Oman
The Sultanate of Oman’s economy was traditionally based on fisheries, agriculture and trade. However, since the discovery and development of its oil and gas reserves, the country has become hugely dependent on its oil industry. Oman has 5.4 billion barrels of proven oil reserves and produced 0.98 million barrels per day in 2021. Over the years, 68-85% of the government revenue has been generated from oil. The sharp fall in oil prices since 2014 led to a burden on government finances, increasing the gap between government revenues and expenditures and further leading to large annual deficits. To reduce the vulnerability of its economy to external shocks, Oman is working on a “development plan focused on diversification, industrialization, and privatization of the economy.”

Currently, Oman’s top oil destinations are in Asia. According to the Sultanate’s official data, China alone accounted for 86% of its crude exports with India at second place at 6.2%, followed by South Korea and Japan. Oman is a ‘high income’ economy as classified by the World Bank.

Rounding Up
The other six non-OPEC members part of the OPEC+ group are Bahrain, Brunei, Equatorial Guinea, South Sudan, Sudan and Malaysia. Together, they hold 8.9 billion barrels of proven oil reserves.
Source: Nasdaq

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