Why oil prices swing so much, and how much OPEC still controls

Originally published December 8, 2014. Updated August 6, 2026.

Oil hit a record $147.27 a barrel in July 2008, then in April 2020 traded at negative $37 a barrel for the first time in history. OPEC is the group of oil-exporting countries, most of them in the Middle East, that meets to agree on how much crude its members pump, in hopes of steadying swings like that. It still moves the market, but it controls a much smaller slice of it than it used to. OPEC’s members pumped around 33% of the world’s crude in 2026, down from a historical peak near 50%.

How much power OPEC has left

A wider group called OPEC+ adds Russia and several other oil-producing countries to OPEC’s own membership, and the two coordinate production changes together. OPEC’s members still hold about 79.5% of the world’s proved oil reserves, in a count from 2022.

The United Arab Emirates gave the clearest sign of that shrinking grip when it left OPEC entirely, announced around April 29, 2026, after a dispute over how much oil it was allowed to pump. OPEC+ met without the UAE for the first time on May 3, 2026, and approved a modest output increase anyway.

That meeting fit a pattern from the rest of the year. OPEC+ spent 2026 unwinding an earlier round of voluntary production cuts, and a 188,000-barrel-a-day increase in September completed that unwind. A separate, older layer, about 2 million barrels a day, stayed held back through the rest of the year.

The wildest oil price swings since 2008

That $147.27 peak, reached on July 11, 2008, is still the highest price a barrel of oil has ever fetched. Prices crashed hard again six years later. Oil sold for around $105 a barrel in mid-2014, then fell to under $30 by February 2016, a decline of roughly 70% to 75%. A “swing producer” is a country with enough spare capacity to cut output when prices sag and pump more when they run hot, holding the price somewhere in the middle, and for decades that role belonged to Saudi Arabia. Saudi Arabia’s choice at the time not to cut its own output and defend the price, the way it had in past downturns, was the moment energy lawyer Elias Hinckley argued, in a piece on this site published around late 2014, that Saudi Arabia had abandoned that role, squeezed by the rising US shale boom.

Prices cratered again in 2020, further than before. Demand collapsed as the pandemic shut down travel and industry, and OPEC+ answered on April 9, 2020, with a coordinated cut of 10 million barrels a day, the largest in the group’s history. Eleven days later, on April 20, 2020, May-delivery WTI futures traded at negative $37 a barrel, the first time in history a barrel of oil cost less than nothing.

Prices spiked again in 2022, after Russia invaded Ukraine and the EU moved to sanction Russian oil, with Brent crude trading over $120 a barrel. The most recent spike came in early 2026. A Middle East war closed most shipping through the Strait of Hormuz starting February 28, 2026, and Brent crude moved from $61 a barrel to $118 within the quarter, crossing $100 a barrel on March 12 on its way there.

Where oil prices stand today

Line up the annual averages and the swings look calmer, even if they aren’t. Brent averaged $81 a barrel in 2024 and $69 in 2025, before the 2026 shock pushed the full-year average back up toward a projected $91. EIA’s own forecast has that easing again, to $74 to $77 a barrel by the second quarter of 2027.

The Hormuz disruption also pulled the two main crude benchmarks apart. Brent, the international benchmark, and WTI, the US benchmark, normally trade within a few dollars of each other. The spread between them widened to $25 a barrel at its peak on March 31, 2026.

How the US shale boom changed the balance of power

Non-OPEC supply is the other half of this story. The United States pumped a record 13.6 million barrels of crude oil a day in 2025, up from the prior record of 13.2 million barrels a day set in 2024 and about 40% more than Russia or Saudi Arabia individually pumped that same year. Saudi Arabia, OPEC’s largest producer, pumped 9.6 million barrels a day in 2025, up from 9.2 million the year before.

Fracking and horizontal drilling, the techniques that unlocked all that oil from shale rock, get their own explanation in how the US shale gas boom changed the energy market. Canada’s oil sands have grown alongside it, a separate non-OPEC supply story covered in what happened to Keystone XL and Canada’s oil sands.

Why the peak oil debate moved from supply to demand

Twenty years ago, the peak oil fear was that the world would run out of crude to pump. The shale boom above helped end that argument. The live debate now is about how long demand keeps growing.

The International Energy Agency dropped its “peak oil demand by 2030” call from the base case in its 2025 World Energy Outlook, and forecasters now disagree on how far demand keeps climbing instead of when it stops.

Source: Forbes (David Blackmon), citing the IEA’s 2025 World Energy Outlook, OPEC’s World Oil Outlook and ExxonMobil, read 2026-09-25.

OPEC’s own number sits about 10 million barrels a day above IEA’s new base case, and both sit well above ExxonMobil’s.

What it means at the pump

Gasoline tracks crude with a lag, and the 2026 Hormuz spike showed up at the pump fast. US retail gasoline reached $3.99 a gallon in late March 2026, and diesel reached $5.40 a gallon the same week, as Brent traded near its high for the quarter. By September, gasoline had eased back to around $3.98 a gallon nationally.

The math behind that connection is straightforward. A barrel holds 42 US gallons, so a $118 barrel works out to about $2.81 of crude sitting inside every gallon, before refining and taxes add the rest.

What would move oil prices from here

Watch the roughly 2 million barrels a day in older OPEC+ cuts still held off the market through the end of 2026. Whether that group unwinds it the way it did with the smaller September layer, or leaves it in place, is the clearest OPEC-side signal of where output goes next.

On the demand side, IEA’s own outlook now expects demand to keep climbing toward 113 million barrels a day by 2050. That’s the number worth checking again the next time IEA publishes a new outlook.