Question

What happens when OPEC reduces the production of oil?

Answer 1

If OPEC reduced output, then world supply will fall. Thus, as supply falls, the price will rise, and the profits of oil-producing countries increase.

(In a demand-and-supply graph, the supply curve will shift to the left and you'll see the change in price.)

Answer 2

O p e c is one of the largest Oil exporting Nation which is owned by Saudi Arabia which exports oil to various countries of the world.

If the price of oil is increased in opec it directly affect the price of the oil in the country. Hence if the price of the oil in Species increased or if the production is reduced then all the countries of the world will face serious decrease in the amount of import of oil from various countries of the world which include the Saudi Arabia. Hence the price of the oil will increase immensely.