How powerful is OPEC?

The fall in oil prices is a real problem, according to the Organization of the Petroleum Exporting Countries (OPEC). The lower the price of oil, the smaller the revenue for the twelve OPEC member countries (Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iran, Iraq, Nigeria, Libya, Angola, Algeria, Equador and Venezuela).

Around 80 percent of the world's crude oil reserves are located in these countries, and together they produce more than a third of the world's crude oil. OPEC was founded in 1960 with the goal of influencing oil prices by coordinating the supply of oil.

Abundant supply, little demand

There is a simple reason for the relatively low current oil price of under $80 (64 euros) per barrel (159 liters): the supply is greater than the demand. In many parts of the world, economic development has been weaker than predicted, which means less oil is needed.

At the same time, the United States in particular, which consumes the largest amount of energy in the world, is tapping into new sources and therefore increasing the oil supply. Using so called hydraulic fracturing or "fracking" technology, oil and gas which were previously inaccessible can be extracted from deep layers of rock.

According to estimates from the International Energy Agency (IEA), the United States could be producing more oil than Russia and Saudi Arabia put together as early as next year.

The price of oil has dropped by around 30 percent since June - despite geopolitical crises like the conflict in Ukraine, the EU and US sanctions on Russia and the growth of the terrorist organization "Islamic State" in Syria and Iraq.

For industrialized countries without any considerable oil supplies of their own, the low price of oil is a blessing. In Gerrmany alone, households and businesses could save 35 billion euros in the coming year, according to calculations made by the high street bank Unicredit.

"This amount is the equivalent of a good one percent of the country's gross domestic product (GDP)," Andreas Rees, the bank's chief German economist, told the news agency Reuters. "That is a powerful easing of our financial burdens, which keeps costs for businesses down and boosts consumer's buying power."

Lower production rates?

But for oil producing countries, lower oil prices mean lower incomes. This can result in serious problems for some countries, including Russia - they can only finance their budget if the price of oil reaches a certain level.

It might be expected that the OPEC countries at least would agree to produce less oil to lessen the supply and push up oil prices. Officially, the group currently produces 30 million barrels of oil per day, each containing 159 liters of oil. The amount has not changed in three years.

But not all member countries keep to the quotas. According to the International Energy Agency (IEA), every day the group produces 550,000 barrels more than the agreed amount.

OPEC introduced a production ceiling in 1982, outlining how much oil the countries could produce. But according to research conducted by Jeff Colgan, a political scientist at Brown University in the US and author of the book "Petro-Aggression: How Oil Makes War," since then, member countries have been producing more oil than the quota allows 96 percent of the time.

Is OPEC less powerful than we think?

The researcher even doubts that OPEC can control the price of oil. "Saudi Arabia probably has some power to affect world oil prices by virtue of its spare production capacity, which it can turn on and off as it desires," Colgan writes in an article in the Washington Post.

"The key point, however, is that it has this power as an individual country: OPEC as an organization adds nothing. Most OPEC members - from Venezuela to Nigeria to Iraq - are pumping their oil as fast as they can, with no spare capacity," he added.

In the run up to the OPEC meeting on Thursday, there has been no indication from Saudi Arabia pointing towards the lowering of production quotas. For this reason, the possible motives of the Saudis have been shrouded in speculation: Do they want to keep the price of oil down in order to make expensive fracking in the US less economically viable? Or are they supporting the US and the EU in their sanctions against Russia, because the fall in oil prices hits Moscow especially hard?

According to political scientist Colgan, OPEC as an organization is too negligent a player in this game. "The world would be better off if it stopped assuming that OPEC drives world energy markets. It does not," he writes in the Washington Post.

Neither should the surge in oil prices in recent years be attributed to OPEC, Colgan argues, suggesting this was down to the rise in demand from Asian countries.

In 2003, a barrel of the crude oil "UK Brent" cost $29 (23 euros). Ten years later the price had risen to $109 (88 euros).