Brief Overview Of The International History Of Oil Cartels

Written by admin on May 29, 2013

The Organization of the Petroleum Exporting Countries (OPEC) is a classical oil cartel.

It’s purpose is to coordinate the production and the sale of petroleum products. The cartel is designed to ensure a steady source of income to oil producing countries and an adequate supply of petroleum supplies to users. Investors in the cartel expect to receive an adequate return on their money.

OPEC is dominated by Saudi Arabia, Iran, Iraq, Kuwait and Venezuela. The cartel has its headquarters in Vienna, Austria.

OPEC began to dominate the energy scene in the 1970s when it jacked up the price of oil to consumers during the 1973 oil crisis.This/tag helps explain it more. The cartel imposed its will on the world to protest the Israeli victory in the Yom Kippur war.

In the 1980s, the OPEC cartel raised the price of oil again. This caused demand to decrease and prices to fall. This action devastated the cartel countries and threw them into a severe recession.

Internal politics are always lurking behind the OPEC cartel. Saudi Arabia has adopted a strategy to supply developed nations with adequate energy supplies. This desire is tempered by other OPEC producers who want to use oil as a weapon to punish perceived enemies. The result is an oil supply from OPEC that can rise or fall on the whims of some OPEC members.

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