What year marked OPEC's first production reduction aimed at propping up prices?

What year marked OPEC's first production reduction aimed at propping up prices?

• A. 1980
• B. 1981
• C. 1982
• D. 1984

Answer: (C)

When producers want to lift a sagging market, they use supply as a lever—cutting output to push prices higher. In the early 1980s, oil prices had fallen after a period of volatility and rising non-OPEC supply, even as demand softened. To counter this and stabilize the market, OPEC coordinated a production reduction in 1982, the first time the group used a formal cut specifically to prop up prices. This move reflected a shift toward defending price levels by limiting supply, rather than letting output rise to chase market share.

When producers want to lift a sagging market, they use supply as a lever—cutting output to push prices higher. In the early 1980s, oil prices had fallen after a period of volatility and rising non-OPEC supply, even as demand softened. To counter this and stabilize the market, OPEC coordinated a production reduction in 1982, the first time the group used a formal cut specifically to prop up prices. This move reflected a shift toward defending price levels by limiting supply, rather than letting output rise to chase market share.