SSC MTS EXAM

Detailed explanation-1: -At the core of this group are the 13 members of Opec (the Organization of the Oil Exporting Countries), which are mainly Middle Eastern and African countries. Opec was formed in 1960 as a cartel, with the aim of fixing the worldwide supply of oil and its price.

Detailed explanation-2: -Saudi Arabia is by far the leading producer of crude oil among the selected OPEC countries, with an average daily production of roughly 9.1 million barrels in 2021. Iraq ranked second, at nearly four million barrels daily.

Detailed explanation-3: -Oil prices increased during 2003-2008 when OPEC’s spare capacity levels were relatively low. Low spare capacity limits OPEC’s ability to respond to demand and price increases, while high spare capacity indicates a withholding of production presumably for price management purposes.