Ecuador, one of the smallest members of the Organization of Petroleum Exporting Countries (OPEC), announced on Tuesday that it will withdraw from OPEC from next year (1) due to financial problems. Ecuador is trying to increase crude oil production to get more income, and has repeatedly exceeded the output quota of the Organization of Petroleum Exporting Countries.
As an organization, the strength of OPEC comes from the ability of its members to cooperate with each other. When Venezuela and Saudi Arabia first established the Organization of Petroleum Exporting Countries in the1960s, their idea was to use the joint influence of several oil-producing countries to manipulate global oil production and thus oil prices. Member States stay in the Organization of Petroleum Exporting Countries because they can benefit from the Organization.
However, the Organization of Petroleum Exporting Countries and OPEC+,led by Russia, failed to boost oil prices, which disappointed Ecuador. If the oil price does not rise, Ecuador needs to produce and export more oil to get more income. Therefore, it cannot tolerate the Organization of Petroleum Exporting Countries (OPEC) imposing production quotas on it.
Increasing production is one of a series of large-scale reforms initiated by the President of Ecuador. As part of the reform, the country has also abolished state subsidies for diesel and gasoline. To this end, it also triggered a series of protests from the people. Protests also affected Ecuador's oil production. Because of roadblocks and blockades, several state-owned and independent oil production companies in Ecuador have reduced their production by about 3 1% every day, that is,165,000 barrels.