OPEC’s Oil Policies Shape Global Agriculture, Mining and Energy Sectors

The Organization of the Petroleum Exporting Countries (OPEC) controls roughly 40% of worldwide oil supply, and its production decisions have a direct impact on input costs for agriculture, mining, forestry and infrastructure. A 10% rise in OPEC oil prices can lift global fertilizer costs by up to 8%, affecting crop production economics, while higher fuel costs increase operating expenses for tractors, combines, ore haulers and mining equipment.

OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to coordinate oil output, but the group borrowed its regulatory model from the United States’ Texas Railroad Commission. Early 20th‑century Texas discoveries such as the Spindletop and East Texas fields made the state responsible for about 40% of U.S. oil and 25% of global production by the late 1930s, providing the template for OPEC’s collective management of oil supply and price volatility.