How does OPEC affect heating oil prices?

What is OPEC?

OPEC stands for The Organisation of The Petroleum Exporting Countries and is an intergovernmental organisation. They produce oil for 40% of the world, these members discuss whether oil production should be increased or decreased depending on global demand and oil reserves. For those who buy heating oil, AGA oil or Red diesel their decision may affect you as it can impact heating oil prices. OPEC was founded in 1960 and is currently made up of 13 nations.

The members include:

• Republic of Iran (1960)
• Iraq (1960)
• Kuwait (1960)
• Saudi Arabia (1960)
• Venezuela (1960)
•  Indonesia (1962)
•  Libya (1962)
•  the United Arab Emirates (1967)
•  Algeria (1969)
• Nigeria (1971)
• Angola (2007)
• Equatorial Guinea (2017) 
• Congo (2018)

Why do OPEC decisions affect people on heating oil? 

As OPEC and oil prices go hand in hand, any of their decisions can fluctuate heating oil prices. If OPEC makes the decision to increase oil production, oil prices tend to drop but if OPEC decides in their meeting to cut oil production, heating oil prices usually increase.

It's wise as a heating oil user to keep an eye on OPEC announcements and upcoming meeting dates on their website https://www.opec.org/, as if you're looking to top up heating oil prices can rise or drop dramatically after meetings. No one wants to get caught out by paying more to heat their homes!

To help you stay in the know, there are heating oil price charts or email alerts available that can inform you on what's going on with oil prices to help make the decision on the best time to buy your oil.

Surprise OPEC production cut

On 2nd April 2023, some OPEC+ members announced a cut in their oil production by over one million barrels of crude oil per day. This caused the price of crude oil to rise between 5-8%. 

Update 05/06/2023

Saudi Arabia announces crude production cut

Saudi Arabia has announced a cut in crude oil production by 1 million barrels per day (bpd) in July 2023. Following the news, the BBC reported crude oil price rose by 2.4% before settling. OPEC+ members also agreed to extend an existing 1 million barrels per day production cut by 12 months until December 2024.

OPEC+ announcements can affect heating oil prices as this increases uncertainty in the price that heating oil suppliers will pay for their oil imports. Keep abreast of the latest heating oil prices with our price charts, or get a quote today to sign up to our price updates.