Why is it difficult for OPEC members to follow production quotas?

It is difficult for members of the Organization of the Petroleum Exporting Countries (OPEC) to adhere to production quotas due to the inherent challenges of coordinating policies among sovereign nations with diverse economic and political interests.12

When OPEC attempts to function as a formal cartel by setting production limits to stabilize prices, it faces a classic collective action problem: each individual member has a strong financial incentive to "cheat" on the agreement. By producing more than their assigned quota or offering secret price concessions to buyers, members seek to maximize their own revenue at the expense of the group's collective strategy.1

Furthermore, members possess varying levels of financial strength and population sizes, which influence their willingness to cut production. Countries with large populations, such as Iran and Iraq, have historically faced pressure to maintain high production levels to support their economies, whereas nations with smaller populations and significant reserves, like Kuwait, have shown more flexibility in adjusting output. These internal conflicts, combined with the sovereignty of each member state, often lead to a tendency to renege on prior agreements made during ministerial meetings.2