Definition
OPEC
OPEC is the Organization of the Petroleum Exporting Countries, a cartel of major oil producers that coordinates output to influence global crude prices.
OPEC, led by Saudi Arabia, and its allies (OPEC+, including Russia) set production quotas that can swing global oil prices by adding or cutting supply. Their decisions are major market events for energy and emerging-market economies.
For India, the world's third-largest oil importer, OPEC+ cuts that raise crude prices widen the current account deficit, stoke inflation and pressure the rupee. India has diversified suppliers, including discounted Russian crude, to reduce OPEC's pricing power over its import bill.
Related terms
- Current Account Deficit (CAD)The current account deficit arises when a country pays more abroad for goods, services and income than it earns, meaning it is a net borrower from the rest of the world.
- Crude Oil FuturesCrude oil futures are contracts to buy or sell oil at a set price for future delivery, with MCX crude tracking the global WTI benchmark in rupee terms.
- Brent vs WTIBrent and WTI are the two main global crude oil benchmarks: Brent from the North Sea prices most international oil, while WTI from the US is lighter and a key American reference.
- Commodity SupercycleA commodity supercycle is a prolonged, multi-year period of broadly rising commodity prices driven by sustained demand outpacing supply, often tied to major industrialisation.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.