The Low Price Of Oil

The Low Price Of Oil
The low price of oil can be directly felt when filling up a car's tank with gas. For many years when
the price of oil drops, there is growth within the economy, however, the recent decline has yet to
deliver the traditional economic boom. Low oil prices have a negative impact on the U.S. economy
as well as the global economy, with a direct correlation to politics. The low prices affect the U.S.
economy in many ways. Cheap oil halts growth in businesses and makes companies less profitable.
These actions will have ripple effects throughout the U.S. as a whole. There are small segments of
business that will be more successful when oil is so inexpensive but the negatives far outweigh the
positives.
According to a post by Patrick DeHaan for ... Show more content on Helpwriting.net ...
Countries that have formed over large deposits of oil now find themselves key players in the oil
game. Saudi Arabia sits atop the largest oil deposits in the world. Many scientists believe that the
Saudi's have over 250 billion barrels of oil within their borders. Gregory Gethard, a senior writer for
Investopedia, explains "The other Middle Eastern nations with sizable quantities all have about one–
half of Saudi Arabia 's reserves. They include Iraq, Iran, Kuwait and the United Arab Emirates."
These countries, and more, for a total of 12, form what is known as OPEC, the Organization of the
Petroleum Exporting Countries. The OPEC cartel claims to control around 78% of the world's oil
reserves. Since OPEC controls the majority of the world's oil supply they can tweak the price of oil
depending on their fiscal goals. If they want to make more money they can withhold oil from the
economy, increasing the price per barrel, and if they wanted to drop the price of oil, they can release
the storage of oil and flood the market. A common benchmark for the price of oil is called the OPEC
basket, this is a combination of oil from the OPEC cartel. A process called refining needs to take
place before oil can be used. To put it simply, the refining process starts by boiling crude oil which
turns into a vapor. In an article for Investopedia, Gethard states "Different types of oil are formed
... Get more on HelpWriting.net ...

Saudi Arabia Is The Major And Dominant Producer Of Oil And...
Introduction:
Saudi Arabia is the major and dominant producer of oil and gas industry as reported by the Royal
Embassy of Saudi Arabia (2015). This position has been held over a good number of years, though
recently, there has been a sharp fall in the world's oil prices. This has negatively impacted the
revenues collected from the exports of oil and gas, forcing the government to act quickly
(Devarajan, 2015, Taylor & Francis Group, 2003). This action came late, and in a bid to stop the US
and Canada in the dominance of shale oil.
The agenda of every prospect industry to dominate and reap better from a venture is to invest. This
is according to the economy to the economy of Saudi Arabia in fourteen months ago when they
made a decision regarding the production of crude oil. They had to cut billions of dollars in the
expected future spending. These strategies were meant to ouster the rivals, and later invest better
part of the revenues in terms of exploration of new fields, state of the art technology in production
and also refining. Earlier on, the Riyadh's revenue had been shrunk, cutting deep to the economy
since this was the backbone of the economy (Kunstler, 2006). In order to secure a better market
share, a decision has to be reached, which might in the short have negative impacts in the economy,
and reap better in future. The giant producer in the Middle East and part of the world may have
measured the depth of water using both legs. This decision is based on the

Causes of Rising Global Oil Prices Essay
Among the factors that often blamed the current price increases embrace the renewed geopolitical
concerns in the Middle East, declining excess capacity in oil production, the production cuts agreed
by the Organization of Petroleum Exporting Countries, the devaluation of U.S. dollar against other
most important currencies, increased demand from rising countries and the noteworthy expansion in
provisional dealings on oil futures market. Traders and speculators can earn from these changes in
values through purchasing or selling Crude Oil CFD's (Kanter, 2008). Over the long term, Crude Oil
is likely to go after strict lines of trend, if one is able to classify a trend appropriately then it is
possible to get earnings from those moves by ... Show more content on Helpwriting.net ...
The head of the Democratic majority in the Senate, Harry Reid, should also allow a vote on a
Republican that would allow States the northeast and northwest to opt for offshore drilling, and a
portion of their rights operations. Such flexibility would be a major shift in U.S. energy policy. For
26 years, Congress has renewed every year because the ban to drill along the coasts of the Atlantic
and Pacific and eastern Gulf of Mexico. Today, offshore drilling off the U.S. coast is limited to the
western Gulf of Mexico, where oil and gas for decades. However, the expansion of offshore drilling
has become a credo reflected in the Republican campaign for the presidential and legislative
elections in November, although this measure has little or no impact on gasoline prices for years
(Caffentzis, 2008). Processes offshore drilling techniques used differ somewhat down, but the
marine environment requires specialized equipment and leads to services. Exploration consists of
geophysical surveys of large areas, made from aircraft and / or ships, core samples taken using
various methods, seismic blast concussion or diverse devices, and test drilling for geological data.
After the formations drilled selected from drill ships or temporary platforms, wells are drilled to
delineate additional oil or gas discoveries and production tests are very broad to determine the
parameters of

Economic Structure of Opec
The Economic Structure of OPEC
For: Professor John Zink
BUS 610–0703B
Economics for the Global Manager
By: Maria A. Journiette
August 31, 2007
Many companies operate under a monopoly which gives them an edge or a corner on the market. In
this discussion we will focus on the differences between a monopoly, oligopoly, and a cartel. We
will also look at what game theory is and its affect on monopolies and cartels and the welfare affect
of each of the above mentioned. A monopoly is defined as, "sole control of a particular line of goods
or services in a given market or the means to control distribution and price."(Webster 's, 2000) In a
monopoly situation there is only one person with a particular good or service and because ... Show
more content on Helpwriting.net ...
Looking at these figures we can see that with the demand the prices continued to rise. Also the war
in Iraq contributed to the increase prices. If we were to look at the price of a barrel of crude oil today
it would top all of these prior years at $71.17 a barrel.(tonto.eia.doe.gov, 2007) The problem is that
the prices continue to rise while the income and wages of the American worker 's remains the same.
With the continued increase in the demand for oil, the financial future for OPEC looks very secure.
So, what about the members, certain countries production will have to decrease while other foreign
countries may have to increase their production. OPEC should continue to strive to look for ways to
be environmentally friendly and ways to keep up with the demand without increasing the cost to the
consumers. If things remain the same the price of crude oil will continue to rise to the point that the
supply may be more than the demand as we continue to look for alternatives to crude oil.
References
Radcliffe, J. (2000). The New International Webster 's Pocket Business Dictionary of the English
Language. Trident Press International; United States of America. m–w.com Retrieved August 28,
2007 from, http://www.m–w.com
Energy Information Administration. This Week In Petroleum. Retrieved August 29, 2007 from,

Effects Of The Seven Sisters Actions Outlined
The key feauture of the seven sisters actions outlined above was their attempts to reduce their tax
liabilities, in a time where the people of the Middle East were calling for nationalisation and equity
participation by the governments of the oil producing countires.
This lead to the creation of the Organisation of the Petroleum Exporting Countries (OPEC) in
Baghdad, 1960. Their initial aim was to ensure the security of their tax revenues from the
International Oil Companies. This can be seen as the creation of a cartel in order to counter the
oligoponistic power of buyers.
In the previous time periods discussed its hard to formally prove that structural change has taken
place in a quantative way. The oil shocks of 1973 and 1979 provide our best opportunity to
definitely prove structural change has taken place in the time series data of oil prices. This is where
we will start before moving onto modeling the behaviour of OPEC during this time and discussing
their role in the shocks.
Using an Auto Regressive model based on Pindyck (1999) on data from 1885 – 1968, taken from the
BP statistical review, we can attempt to explain the price of oil through its own lagged price. We
report an R–squared value of 0.82 (suggesting 82% of the data is explained in the model), whilst the
drawbacks of reporting R–sqaured values are well established this is still a useful proxy for
determining the success of the model. It should be noted that all data values are logged to detrend
the data

Opec Essay
Introduction
In our society, oil is one of the core requirements. Whether it is to drive from a point A to a point B
or to fly between distant countries, oil always had a fundamental impact on our civilization. Its
impact is felt, on a daily basis and under many aspects. Not a day goes by without hearing about the
Brent's changing undulation, on the markets in New York or London. Some have thought that the
desire to gain control of Iran's oil resources was the core of the CIA's intervention in that country, in
the 1950s. In recent years, it was considered, by left–wing groups, that the war in Iraq was based
upon an attempt of foreign control over the Iraqi petroleum resources. Even though both events have
an unquestioned place ... Show more content on Helpwriting.net ...
They formed the Organization of the Petroleum Exporting Countries, or OPEC. Since the OPEC
was instated to protect the interests of oil producers, it could be seen as an example of regional
integration. The OPEC is widely considered, throughout the world, as a cartel. This would be an
intellectual misconception. The concept of cartel would consider oligarchies limiting competition
and monopolies increasing prices. Oppositely, many international oil producers are not members of
the OPEC. These non–members saw a fourfold increase in the oil prices, during the 1973 oil
embargo. In A history of the modern Middle East, William L. Cleveland and Martin Bunton stated
that the immediate objective of the OPEC was "to utilize the collective bargaining power of its
member states to pressure the Western oil companies to increase oil prices.". However, the birth of
the OPEC did not occur, overnight. In 1947, the Venezuelan and Iranian delegations held talks in
Washington, to coordinate their oil policies. In OPEC: Past and Present, Abdul Amir Q. Kubbah
stated that the Arab league had a project of creating an "association of Arab oil–producing
countries.", since 1945. The first OPEC–type grouping occurred in 1953, when Iraqi and Saudi
delegates joined forces. The agreement between these two states was the first to involve cooperation
from both governments. The Arab League held a summit in Cairo, in 1959. During that summit,
"views have been exchanged concerning the

Opec
Definition and Introduction to OPEC
OPEC, The Organisation of the Petroleum Exporting Countries, is a name that has become
synonymous with the worldwide petroleum market. But what does it do, who is involved and how
important is OPEC to our day–to–day lives? This article aims to answer these basic questions in a
clear and concise fashion.
OPEC is a permanent organisation of 12 countries which are world–leaders in oil production. The
primary aim of OPEC is to unify petroleum policies between its member countries, to ensure fair
and stable oil prices. OPEC also tries to ensure a steady supply of petroleum to oil consuming
nations.
The headquarters of OPEC are found in Vienna, Austria.
Brief History of OPEC
OPEC was created in 1960 ... Show more content on Helpwriting.net ...
There have been several key points in the organisation's history where they have taken the decision
to alter oil production. For example, during the Gulf War in the early 1990's OPEC produced more
oil, to try and stabilise world supplies. OPEC tightened supplies during 1979–1980, which led to an
increase in oil prices. OPEC once again tightened supplies in 1999, which eventually led to record
oil prices in 2008.
OPEC decides what their overall oil output will be at bi–annual conferences. Delegates and oil
ministers from member countries meet to work out production upper limits for each member.
Occasionally these conferences will be called more than twice yearly if there is a major change in
the global oil market.
Though the influence of OPEC on crude petroleum prices is substantial, the influence of OPEC on
end products, such as petrol, is less important. Oil product prices can be affected by numerous
factors, notably government policies and taxes.
OPEC Oil Reserves and Production
OPEC countries collectively produce over 40% of the world's crude petroleum and a significant
amount of natural gas. As of 2010, it is estimated that over 80% of proven oil reserves in the world
are found in OPEC member countries, or in barrels, 1190 billion barrels of crude oil.
It must be noted that many of the member states are heavily

Opec And Oil And Exporting Countries
Consisting of 12 producers of oil and exporting countries Organization of the Petroleum Exporting
Countries (OPEC) is one of the intergovernmental organization. Three continents over which the
organization is spread is Asia, America, and Africa.12 oil producing countries in the organization are
as follows: America, Asia and Africa. These12 countries are: Algeria, Angola, Ecuador, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. The present
headquarters of the organization is located in Vienna Austria. During the initial stage, Geneva was
the headquarters of the organization.
Major objectives of the organization are to unite and coordinate the policies that govern the export
and import of ... Show more content on Helpwriting.net ...
Over the years, OPEC has been able to achieve this objective by being focustive on the production
of oil. They reduce and increase the production as and when required. For instance, several million
barrels of oil was removed from market during the Gulf Crisis in 1990. (www.opec.org).
The three major websites that affect the price of crude oil in the present global market are, New
York Mercantile Exchange (NYMEX, http://www.nymex.com), the International Petroleum
Exchange in London (IPE,http://www.ipe.uk.com) and the Singapore International Monetary
Exchange (SIMEX,http://www.simex.com.sg).
Other websites that also serve information about the price of oil are the web sites of the Paris–based
International Energy Agency (IEA, http://www.iea.org) and the US Energy Information
Administration (EIA, http://www.eia.doe.gov).
Influence of OPEC in Oil Production and Oil Prices:
In order to coordinate the oil production policies the ministers of the organization meet twice in a
year. They discuss about the methods to balance the supply and demand in the future. It is not
necessary that the member countries alter the production during the delegation of the meeting. There
are 1,199,707 million barrels of crude oil barrels by the end of 2011, representing nearly 81 percent
of the total reserves. (www.opec.org).
Given that OPEC Countries deliver around 43 every penny of the world 's raw

Opec Stands For Organization Of The Petroleum Exporting...
OPEC reaches deal to cut production, sending prices Soaring. OPEC stands for Organization of the
petroleum Exporting countries. It is an intergovernmental organization of fourteen nation. It
coordinates petroleum policies and stabilize the oil market. This will help them secure regular
supply of petroleum in order to keep a study income and growth. Petroleum have become one of the
most powerful asset or natural resource that any nation could have. And because it's so Important it
has changed the world for the good and worst. Petroleum has lead into wars and it has also tightened
international relationships. One of the reason, that there are some kayos in some part of the middle
east is because of Petroleum. OPEC is founded in Bagdad its head quarter is in Vienna. Two third of
OPEC population is founded in the middle east countries that surround the Persian Gulf. The most
Important goal for OPEC is to make profit for the members. Because there is no real substitute for
oil, OPEC reduces production and then increases Price for oil. Because it's hard to control all
countries production, especially the countries that are not a member of OPEC , it has been hard for
OPEC to have firm a control over the Petroleum market. Because the Petroleum Industries are
Oligopoly this relates to chapter 13 which is Oligopoly and Strategic Behavior. OPEC is a cartel
which mean one of its main goal is to control the production and aim for profit

Petroleum As Vital For Human Existence As Water
Austin Kiesewetter
Mrs. Ioanna
HCC English – 3
Petroleum as Vital to Human Existence as Water From the development of the Industrial Revolution
to the Information Age we live in today our civilization has been able to progress with the help of
the Industrial Revolution's basic necessity known as petroleum. This resource is so valuable that it
has been the reason of 6 global conflicts and the creation of a trillion dollar industry. James Buchan
a Financial Times correspondent stated, "A century ago, petroleum – what we call oil – was just an
obscure commodity; today it is almost as vital to human existence as water." The uses petroleum
have are relevant from transportation to everyday synthetic materials. It is the sole reasoning ...
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In order to keep up with demand, the United States has been forced to rely on importing 80% of its
crude oil. This niche was filled from the creation of OPEC who uses price gouges to create an
economic boom in their country, through unifying and controlling the industry. This economic boom
produced by OPEC amounts to an annual 730 billion (U.S.) dollars. In order to fully understand the
magnitude of power this organization has, we can compare their annual income to every country 's
GDP. After doing this we notice that OPEC would be the 20th wealthiest nation trumping 167
countries in the process. This fact is mind boggling because when we talk about GDP we are talking
about the value of all the finished goods and services produced within a country. When we talk
about OPEC we are talking about a single product which is crude oil. This is worrisome for many
reasons, first and foremost being that countries who are not members of the organization don 't want
one organization controlling and monopolizing such a valuable resource.
The effects of monopolizing a single product is the power of setting a single price that everyone else
needs to follow. This is why America and other non–OPEC countries deal with gouging oil prices.
The reasoning for OPEC doing this is clear from ridiculous profit margins to political influence. The
power that OPEC holds was never more prevalent than in the 1973 embargo on the U.S. and
European nations over the Arab–Israeli War. The

Opec – Formation and Influence on the World Economy
OPEC – Formation and influence on the world economy
Ahlam
Colorado Heights University
Abstract
The Organization of Petroleum Exporting Countries (OPEC) , is a permanent intergovernmental
Organization, created at the Baghdad Conference on September 14 th, 1960, consisting of the
world's major oil–exporting nations. It was founded to coordinate and unify the petroleum policies
of its members, to serve as a platform for oil producers to achieve their economic objectives by
limiting supplies in the hope of keeping prices and profits high. OPEC's influence on the market is
undeniable. Because its member countries hold the vast majority of crude oil reserves (about 80%)
and nearly half of natural gas reserves in the world, the organization ... Show more content on
Helpwriting.net ...
"Member Country Delegations (Representatives of OPEC Member Countries) meet at the OPEC
Conference to co–ordinate and unify their petroleum policies in order to promote stability and
harmony in the oil market." (OPEC, March 2009)
The supreme authority of the organization, OPEC Conference consists of representatives of OPEC
Member Countries. It's supported by the OPEC Secretariat, directed by the Board of Governors and
run by the Secretary General, and by various bodies including the Economic Commission and the
Ministerial Monitoring Committee. (OPEC, March 2009) According to OPEC website " The
Member Countries consider the current situation and forecasts of market fundamentals, such as
economic growth rates and petroleum demand and supply scenarios. They then consider what, if
any, changes they might make in their petroleum policies. For example, in previous Conferences the
Member Countries have decided variously to raise or lower their collective oil production in order to
maintain stable prices and steady supplies to consumers in the short, medium and longer term."
(OPEC, March 2009)
Does OPEC control the oil market?
According to OPEC, "No, OPEC does not control the oil market. OPEC Member Countries produce
about 40 per cent of the world's crude oil and 15 per

Disadvantages Of Carttel And Monopolies
In a free market all firms have equal opportunities for fair trade of goods and services. Within the
various industries, such economies experience higher competition which results in the better quality
products and lower prices. However, in some situations markets do not experience fair competition,
and are controlled out by one large firm, or an organization or group of firms or countries. It is
clearly explained how they are similar or divergent to one another and the disadvantages of the
markets that are exposed to cartels and monopolies.
A cartel is a group of oligopolies that come together as one firm to protect their interests. An
oligopoly is a few sellers, and each seller is interdependent on others, what one does impacts other
competitors. Once they have formed as one, the cartel fixes the prices for the members, so they can
avoid competition prices. This is why ... Show more content on Helpwriting.net ...
Also, they both are equally harmful to free market places causing consumers to pay inflated prices
for low quality necessities. The main difference between cartels and monopolies is that have only a
single player whom single handedly controls the production of supply, and pricing of a particular
product. A cartel is a group of oligopolies that come together as one firm to protect their interests. In
a cartel the entire group or cartel members will benefit and in a monopoly only one group benefits.
"Cartels break up occasionally because of cheating or lack of effective monitoring, but the biggest
challenges cartels face are entry and adjustment of the collusive agreement in response to changing
economic conditions." (Levenstein) "Monopolies do disappear. Sometimes a monopoly disappears
relatively quickly, perhaps in only a few years. Some monopolies do, however, last decades."
(Monopoly) However, in both situations the consumer ends up on the short side of the

Has OPEC been a Successful Cartel?
A cartel is an organisation of producers grouped together for their own benefit. The most well
known cartel in existence today is OPEC, Organisation of Petroleum Exporting Countries. Its
members are some (but not all) of the most important oil producing countries including Saudi
Arabia and Mexico. Most cartels try to raise prices at the expense of consumers.
The aim of this essay is to determine whether OPEC has been a successful cartel, this will mean I
have to examine the strengths and weaknesses of OPEC which have been present throughout their
existence of supplying oil. This should allow me to make an appropriate judgement on whether
OPEC has been a successful Cartel.
The history of oil prices can give me important information on how ... Show more content on
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Political events in the Middle East saw Iraq invade Kuwait, as a result oil sanctions were applied to
the output of both countries by oil consuming countries. Other oil producing countries feared of a
major shortage in supply as prices rose from $18 to $40 a barrel; as a result other non–OPEC
countries reacted by increasing production in oil. Prices fell back as overall supply returned to
normal. Since the successful counter by the US to retake Kuwait, the price of oil has seen a steady
drift downwards in price. This has also led to OPEC losing out due to more countries increasing
production in oil; causing an increase in competition.
Restricting competition is not necessarily easy. There are three potential problems that OPEC has to
overcome due to it being a cartel. These are explained below:
An agreement has to be reached
The larger the number of firms, the greater the possibility that at least one key firm participant will
refuse to collude. In the case of OPEC, this may well be difficult due to political disagreement that
has regularly occurred during OPEC 's history.
Cheating has to be prevented
Once an agreement is made and profitability in the industry is raised, it would pay an individual firm
to cheat so long as no other firms do the same. In the case of OPEC, with the increase in non–OPEC
supply has led to strains among OPEC members. This has led to an increased incentive to
cheat(mentioned further on in the essay).

The Crisis Of The Global Oil Crisis
The global oil prices have fallen sharply since the second half of 2014, which has led to a series of
economic problems. Oil prices have been stable from 2010 until mid–2014, remaining at around
$110 a barrel (BBC News). However, prices showed a sharp decline since June 2014 and have been
more than halved now (BBC News). Brent Crude oil is priced below $50 a barrel and US crude is
dipped down to below $48 a barrel now (BBC News). Oil prices shock is making the whole oil
industry straggling. In particular, oil producing and exporting nations including Russia, OPEC
(especially Venezuela and Saudi Arabia), and United States are the major victims in the oil prices
shock. They are suffering from a fallback in their economy development due to the significant
revenue shortfalls. Russia is suffering from a significant economy recession (BBC News). Brad
Plumer points out that economy in Russia is "facing a potential meltdown"; Venezuela is "facing
unrest" and "may default on its debt"; and Saudi Arabia will face heavy pressure if the price remains
low even it has prepared for the shock (par. 7). Nonetheless, low oil prices are welcomed by oil
importers like Europe, Asian countries, especially China, Japan, and India because they can pay less
for oil. Europe's flagging economies are characterized by low inflation and slow growth, receiving
0.1% increase in economic output when a 10% fall happened to oil prices (BBC News). China, the
largest net importer of oil is surely benefiting

Opec And The Price Of Oil
OPEC and the price of oil
The organization of the petroleum exporting countries or OPEC was created at Baghdad Conference
in Iraq in September 1960. The founding members of organization were Iran, Iraq, Kuwait, Saudi
Arabia and Venezuela. These five states were later joined by nine other countries: Qatar (1961),
Indonesia (1962), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971),
Ecuador (1973), Gabon (1975), and Angola (2007). Ecuador and Gabon withdrew from the
organization in 1992 and 1994 as Indonesia in 2007 respectively. OPEC relocated its headquarters
from Geneva to Vienna in 1960. The purpose of OPEC, as with any cartel, is to limit supplies in the
hope of keeping the price high. The oil industry has been plagued by production booms and falling
prices ever since Colonel Drakes' discovery of oil at Titusville, Pennsylvania in 1859. Just as major
oil companies colluded from the 1920's to the 1960's to present prices and profits from falling,
members of OPEC meet at a regular basis to set production levels in the hop of maintaining prices.
The essential nature of oil (no substitutes) coupled with its limited number of suppliers make it the
ideal product monopoly.
"When OPEC was formed in 1960, its main goal was to prevent its compromise the world's largest
oil producers, refiners, and marketers–from lowering the price of oil, which they had always
specified, or reported. OPEC members sought to gain greater control over oil prices by

Module 11: The Economic Crisis In Venezuela
Venezuela
What would happen to Venezuela if the oil disappears? Venezuela is going through a very critical
situation in which the economy is being affected. One of the reason why the situation in the
economy in Venezuela is so urgent right now is because they are depending 96% on oil. That is one
of the reason why in Venezuela, the people can't buy basic product. To solve this problem,
Venezuelans should find a way to expresses their voice in the "Organization of the Petroleum
Exporting Countries" (OPEC) because that is the organization that has the power to raise the prices
of oil. Another way that this problem can be solved is that Venezuela must stop depending only on
oil because, they can use other natural resources which will greatly ... Show more content on
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according to the article called 'La Voz Del Consumidor' the Dr. Pedro Delgado Machado,
Psychiatrist, said "The strong economic crisis in Venezuela, is affecting all its inhabitants, if n matter
the social stratum to which it belongs. Money is essential to cover our basic needs: food, clothing, a
home etc. Therefore, many studies have shown that the missing money, you can generate emotional
distress of the individual and his inner circle, causing worrying levels of stress", this mean the most
of the people from venezuela can have mental problems as serious as the situation in which they are
being unable to buy or have the basic needs that human beings have this can cause "estre",
frustration, helplessness and all this leads to be able to have mental problems. Also Venezuelas
people live in a churning of life as they make long queues for hours after hours without saver if they
can get the basic food to support their families. cuale's a reason this is happening is because
Venezuela is only dependent on oil and at the same time can not do much to change their situation
because OPEC is that it will control everything that has to do with

The Price Of Oil, Natural Disasters, Economic Trends And...
A number of theories have emerged as to why the price of oil has taken a severe plummet since its
peak in June 2014. The price of crude oil was around $115 a barrel at in June 2014. By 2015, it had
fallen by more than 40% to below $70 a barrel. (Petroff) There has been exhausting speculation over
this matter including reasons relating to geopolitics, natural disasters, economic trends and the lack
of regulation by the Organization of Petroleum Exporting Countries (OPEC). OPEC is the vicar of
oil pricing, but has clearly contributed to the drastic price drop in the past year. The standard of
OPEC is to ensure balance in the oil markets in order to secure a proficiently economic and steady
supply of petroleum to consumers. (OPEC) In November 2014, OPEC failed to reach an agreement
on setting a standard of how much petroleum each OPEC nation could produce, which essentially
drove down the price of oil. If all of the countries in OPEC are not mandated to supply a fixed
amount of oil, they will produce enough to drive down the price making it comfortable for
consumers and importers to buy. This has been part of the issue since the plunge began. This de–
regulation creates competition because each oil–producing country wants to set the most profitable
price, which requires oil production exceeding the typical OPEC standard. The plummeting prices of
oil have created positive and negative effects in different industries. The transportation and
industrial industry experience lower

Opec Essay
Assuming the OPEC has created a more competitive oil market, and it leads to a dramatic decrease
in the world average oil price. Deal to the situation as described above, Australia is standing at a
position that the rate of inflation decreases significantly. Considering the relevant response towards
the change of rate of inflation, the level of real GDP and the unemployment rate in the short term
operation and long term operation respectively, this analysis on OPEC would be divided into two
main parts: the outcomes without the lower inflation rate causing a change in potential output and
the outcomes with such a change in potential output. In addition, the framework of aggregate
demand and the aggregate supply would be employed in the explanation ... Show more content on
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At the beginning, the decrease in oil prices affects the suppliers who relative to petrol only in the
society. So in response to the decrease rate of actual inflation (inflation decreases from 0 to 1), the
aggregate supply curve will shift to the right (from AS1 to AS2) in the short term of business
operation because those firms will wish to sell more at this stage. Also the decrease actual rate of
inflation would cause a movement down from Point A (the initial point of long run equilibrium) to
Point B along the AD curve and a new short run equilibrium point at Point B is achieved. At the
same time, with the significant decline in oil prices comes a decline in price of substitute sources of
energy also such as natural gas and electricity. This happens when firms tend to use more petrol as
input because the petrol is significant cheaper, and as a result, the decrease in the demand for other
substitute sources is pushing their current prices down as well. Therefore the potential output will
increase rapidly (from Y1* to Y3*) due to the more capital being utilised (as firms choose to use
more less–efficient and more expensive to operate capital that are intensive in their use of energy).
Hence the sizes of supply shock is less than the size of potential output shock. Now a contractionary
output gap appears as the actual output Y2 less than the potential output Y3*. According to the
Okun's Law, the actual unemployment rate is greater than the natural unemployment rate (u>u*)
because of the negative output

Essay about OPEC Presentation
Overview of OPEC
Is a permanent, intergovernmental Organization, created at the Baghdad Conference on
September, 1960.
Founder Members:
Later joined Members
Iran
Iraq
Kuwait
Saudi Arabia
Venezuela
Qatar (1961)
Indonesia (1962) – suspended membership 01/2009
Libya (1962)
United Arab Emirates (1967)
Algeria (1969)
Nigeria (1971)
Ecuador (1973) – suspended membership 1992–2007
Angola (2007)
Gabon (1975–1994)
Objectives of Opec
OPEC's objective is to co–ordinate and unify petroleum policies among
Member Countries in order to secure fair and stable prices for petroleum producers; an efficient,
economic and regular supply of petroleum to consuming nations; and a fair return on capital to those
investing in the industry. ... Show more content on Helpwriting.net ...
In response OPEC introducing a group production ceiling divided among Member
Countries and a Reference Basket for pricing, as well as dialogue and cooperation between non–
OPEC countries
State–owned oil companies in emerging–market economies experienced a boom on this years by
providing the oil gap cause for the OPEC embargo to those countries in need of the hydrocarbon.

The 1990's and Nowadays
1990's was marked by excessive volatility and general price weakness dominated the decade, lead
by the Middle East disputes between Iraq, Iran and Kuwait
However, a solid recovery followed by a more integrated oil market, which was adjusting to greater
globalization, communications revolution and other high–tech trends.
Ten years after, another war took place between USA and
Iraq which prompted a sharp rise in oil prices to levels far higher than those targeted by OPEC
themselves.
This increase was boosted even more as OPEC members spoke openly about converting their cash
reserves to the euro and away from the US dollar and by the disputes between OPEC members
concerning the production quotas .
OPEC Role in Economics
OPEC is a swing producer, and its decisions have had considerable influence on international oil
prices.
Although they called for stable and just commodity prices, an international food and agriculture
program, technology transfer, and the democratization of the economic system the evidence
suggests that OPEC did act as a cartel when it adopted output

Opec Organization Of The Petroleum Exporting Countries
The region I chose is OPEC, which is the Organization of the Petroleum Exporting Countries.
OPEC was established in 1961 with 5 countries. Since then, it has expanded to 12 countries:
Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab
Emirates, and Venezuela. As technology improves and the production of oil and natural gas
fluctuates, changes in the economy will occur and create tensions and conflicts, as well as
opportunities. Because of OPEC 's impact on the global economy for natural gas and oil, the
strengthening of these countries ' connections open the door for the emergence of a new world
region. There are many economic indicators that affect the OPEC organization. This chart is a ...
In a speech made by Mr. Mohammad Barkindo, OPEC is focused on "Securing an efficient,
economic and regular supply of petroleum to consuming nations; and a fair return on their capital to
those investing in the petroleum industry." The organization holds meetings to discuss what is going
on in the global oil and gas economy to establish a reasonable price per barrel. Each country holds a
different number of the global oil reserves so the price effects them differently. If the market can
stabilize at the right price, the countries can move past tensions and build stronger relationships and
create a larger global impact. According to the U.S. Energy Information Association, " OPEC
member countries produce about 40 percent of the world 's crude oil. Equally important to global
prices, OPEC 's oil exports represent about 60 percent of the total petroleum traded internationally."
The other 60 percent of production comes from non–OPEC countries. According to opec.com, the
OPEC countries are in control of 81 percent of the crude oil reserves. The demand for oil is
increasing exponentially. The United States alone is expected to increase by 1.6 billion barrels by
2016. The organization contains a spare capacity on hand in case of an oil crisis. The number each
country can reserve is based on the refinery capacity, which can be seen in the OPEC

Opec 's Growth And Business
Synopsis
OPEC was founded in 1960 with 5 counties and the goals to be a dependable oil market for
themselves, and to stimulate economic growth in other countries. Leading up to the 1970's OPEC's
growth and business was relatively unnoticed until an Iranian revolution and Arab oil embargo
pushed oil prices to new levels. Changing consumer opinions about oil and over supply led to a
market crash in 1986; but from 1990 through to 2000 prices strengthened from increases in
technology and a more global market. In 2008 the stock market crisis rippled through all industries
and even caused the oil market to suffer. Oil prices then rebounded and at June 2014 oil prices set a
record high. OPEC currently has just under 40% of the market share and ... Show more content on
Helpwriting.net ...
Because so much of Canada's economy is based off of profits from oil production, the dollar is
largely influenced by oil prices. OPEC's cartel based influence over international oil prices means
that they also have a strong influence over the Canadian economy. A brief period of time, referred to
as the "honeymoon period", occurred when both Canadian businesses and consumers were highly
profitable. All non–oil businesses would have felt this gain because their cost of business would
have decreased, and as labour from ex–oil workers became more available, labour would have
become cheaper. With the decrease in oil, the price of goods decreases, and new alternatives can be
sought after that was previously too expensive due to transportation. International trade also
increases because the cost of moving goods decreases. The "honeymoon" period ends when all
citizens and businesses feel the lower income from oil. This is likely accompanied by a falling
Canadian dollar, which will lead to gains for export companies, but losses for import companies.
Trade agreements also lose their attraction to foreign governments because a key resource is no
longer profitable.
Overview This paper will discuss the current situation of OPEC having an absolute advantage over
oil production, how OPEC's petroleum monopoly affects Canada 's economy and it's effect in oil
based job industries. It will discuss how OPEC has a significant amount of power over the Canadian

Opec And The Oil Field
Before really understanding OPEC and the oil field, it is important to understand how they both
began and what is currently occurring in the oil market. The production of oil has been around since
the mid 1800's here in the United States. In the late 1850's, the first drilling rig made specifically for
oil drilling was created by George Bissel and Edwin L. Drake. It was named the Drake well. Keep in
mind that although this was the first oil drilling rig made, this is not the first time that someone had
hit oil while drilling. In the other instances, the persons drilling were in search of salt or drinking
water, and hit oil pockets as a side effect. After this significant event in history, the oil field has
experienced many ups and ... Show more content on Helpwriting.net ...
It was founded by Kuwait, Iraq, Iran, Venezuela, and Saudi Arabia. Its sole purpose is to enact
policies that set production limits for its member countries. Its goal is to maintain order among the
countries. This would create fair prices for all of those countries who produce oil, as well as a steady
supply to those countries who consume the oil. OPEC does not have complete control over the price
of oil as the actual market influences that also (OPEC Fast Facts). These policies, production cuts
and production increases also rely on the honor system between the countries. When production
quotas are set, the countries all agree to abide by those quotas. If one country does not abide by the
rules, there are no penalties that the country could face. On the other hand, countries will not
produce very much over the quota in fear of being banned from OPEC.
In the 1960's, OPEC came into existence with the five original founding members. By the end of
this decade, it had grown to ten members, which now included Qutar, Indonesia, Libya, United Arab
Emirates and Algeria. By the 1970's OPEC's power and influence over the price of oil had grown
immensely. It was at this time since OPEC had been in effect that we had really observed an
increase in the price of oil per barrel. In 1973, the Yom Kippur War occurred against Israel, led by
Egypt and Syria, which were part of the Arabian countries. The Arab's struck back and enacted an
embargo against any country who

Essay on Understanding OPEC: An Economic Analysis
Understanding OPEC: An Economic Analysis
In the last few months, much has been said of Iraq's invasion of Kuwait in 1990. Interestingly
enough, one of Iraq's motivating factors was economics. Kuwait provided Iraq with a pretext for war
as it violated the economic policies of the Organization of Oil–Exporting Countries by exporting oil
above its quotas. This is but one chapter in the complicated history of OPEC. OPEC is an
international assembly of nations which co–ordinates and unifies the petroleum policies of eleven
countries and has enjoyed the highs and weathered the lows of oil prices in the last few decades. To
solve their problems, both member countries and oil–importing countries must address the complex
nature of oil price ... Show more content on Helpwriting.net ...
Furthermore, a 1999 study reveals that OPEC countries commands reserves of 8111,526 million
barrels of crude oil, representing 77.8% per cent of the world total of 1,042,536 millions barrels of
crude oil" (FAQ 8). While this block of countries does not qualify as a clear–cut monopoly, it exerts
tremendous influence on world supply and prices.
OPEC has little concern for maximizing consumer surplus at the point where marginal cost
intersects marginal revenue. Instead, it prefers to maximize profits. It constitutes one of two main
players in a duopoly (when non–OPEC countries are considered a bloc).
In 1973, OPEC drastically cut oil supply and saw the price of one barrel of oil skyrocketed to ninety
dollars per barrel. The OPEC member countries amassed massive profits which reinvigorated
stagnant economies. Slowly, however, the price of oil dropped, reaching a low of ten dollars in
1998. Short and long–term elasticity explain this movement of oil prices.
The decrease in supply of oil in 1973 and the ensuing price increase illustrates the short–term
inelasticity of oil demand. Elasticity measures buyers' and sellers' response to market condition. A
highly inelastic product does not see demand drop as prices increase. Conversely, a highly elastic
product sees demand drop significantly as price increases. In the short run, oil proves to be almost
perfectly inelastic. This good is a necessity for all oil–based economies such as that of the United
States with

Chinua Crude Prices And Its Implications On India
FALL IN CRUDE PRICES & ITS IMPLICATIONS ON INDIA
Introduction:
The presence of crude oil was first discovered in China way back in 3rd or 4th century A.D. The
presence of oil in India was discovered in late 1889 at Digboi in Assam where the first crude oil
refinery was set up in 1901. India is not among the major oil producers and that is why it generally
depends on imports from other countries. The largest crude oil producing country is Saudi Arabia
followed by Russia and America. The extent of the commodity's importance was shown to the world
when the world's strongest economies were shaken up as the oil prices shot up in 1973 and 1979,
after this the whole oil sector was nationalized in India. Currently, crude oil alone is responsible ...
One of the main reasons is the mismatch between the demand and supply of oil. Due to sluggish
pace of global economies, the demand has been reducing. The other more important reason is
tremendous increase in production levels by the oil extraction using Shale Gas formations in wells
of Texas and North Dakota. When the oil prices were at $110–115/barrel, they drilled oil from shale
gas formations which was earlier considered unviable due to low profit margins. This drilling has
resulted into a supply glut which is further helped by Saudi Arabia and OPEC who are reluctant to
decrease production. Source: www.wtrg.com
It is said that OPEC as a cartel has been unfruitful is maintaining the price levels. Some say that
OPEC and Saudi Arabia are purposely not relenting to reduce the production as oil production from
Shale Gas formations is much more expensive than oil production at Saudi Arabia (~$5–6/barrel)
which is the lowest in the world. OPEC and Saudi Arabia hope to wipe out the Shale Gas producers
by the continued fall of crude oil price levels to less than $50/barrel after which it is believed that it
would be unviable for the Shale Gas producers to continue.
Impact of the fall for India Crude Oil prices affect the life of the average human being in India in
multiple ways– from food prices to transport costs. It would seem that falling crude oil prices is
great news which couldn't

Economics
OPEC
Presented By Ashok, Vinod and Prashant
AGENDA
 Introduction to OPEC  OPEC Important Events
 Present and Future
 Feedback
Introduction
What is OPEC?
 The Organization of the Petroleum Exporting Countries (OPEC) is a permanent,
intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by
Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.  Members Qatar (1961) Indonesia (1962) –
suspended from January 2009 Libya (1962) United Arab Emirates (1967) Algeria (1969) Nigeria
(1971) Ecuador (1973) – suspended (1992– 2007) Angola (2007) and Gabon (1975–1994) Having
Headquarters in Vienna Austria Since Sep1, 1965.
World proven reserves for India country (million barrels) 2007 2008 2009 2010 ... Show more
content on Helpwriting.net ...
 Ten days after the outbreak of the war, the "Gulf Six" (Iran, Iraq, Abu Dhabi, Kuwait, SAU and
Qatar) decided to raise oil process by 17 % from $3.12 to $3.65 per barrel and also announced cuts
in production.  The first country that was embargoed by Saudi Arabia and other countries was the
US on October 19, 1973.  On November 5, more cut in production of 25 % below the September
level. The embargo was also extended to Portugal, Rhodesia and South Africa.  The next
significant price increase after a meeting of the OPEC Gulf Six in December 1973 : $5.12 per barrel
to $11.65.
OPEC – Important Events
OPEC – Oil Crises : 1973 – Frist Oil shock  In order to cope with the enormous oil price increases
and their economic impact, the United States held an energy conference in Washington in February
1974.
 Attended by 13 industrial and oil–producing countries. After a common agreement, the Arab oil
ministers in March announced the end of the embargo against the United States (excluding Libya).

 In June and July the embargoes against all the other states were lifted.
OPEC – Important Events
OPEC – Oil Crises : 1973 : Short and Long term effects  Impact on Worldwide growth rate,
International trade and Foreign Direct Investment – FDI  In terms of world economy growth rate
of 6.9% in 1973, fell to 2.1% in 1974 and 1.4% in 1975. Only in 1976, after three years of

Opec Organization Of The Petroleum Exporting Countries Essay
Josh Howard & Stewart Devaney
Principles of Economics
11/23/16
OPEC The OPEC (Organization of the Petroleum Exporting Countries) created in 1960 is a
permanent intergovernmental Organization. Was formed at the conference held in Baghdad. The five
founders Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Later down the road they were joined by
nine other countries. Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador,
Angola, and Gabon. They joined between the years 1961–1975. There were some countries that had
some issues being in the OPEC. Indonesia suspended its bid in January of 09' , then reactivate it in
2016 only to suspend it again a few months later. Ecuador also suspended it 's bid in December of
92' only to reactivate it in 2007. Gabon terminated their bid in January of 95' but decided to rejoin in
the summer of 2016. OPEC started its headquarters in Geneva, Switzerland for the first five years
only to move to Vienna, Austria, in September of 65'. The whole reason for the OPEC'S forming
was to co–ordinate and unify petroleum policies among the Members countries of involvement. It
was used to secure fair and stable prices for the petroleum producers. Also the economic of the
regular supply of petroleum to the consuming nations. With the fair return of capital going back to
those investing nations in the industry.
In 1960 the five founders of OPEC (Organization of the Petroleum Exporting Countries) Islamic
Republic of Iran, Iraq,

Impact of OPEC's Oil Pricing on the Petroleum Market
Energy resources are essential for national security, technological development, overall
contemporary life style, etc. In this respect, oil is the main source for worldwide economy. Peak oil
would imbalance countries' economical situations and may lead to a chain reaction with negative
effects on multiple layers. Evidently, there is mutual interest to prevent such a thing from happening
but the possibility is nevertheless considered. OPEC's initial goal to ensure stable prices on
petroleum markets in order to avoid any negative fluctuations did not always correspond. The
organization actually favored inflation more than in one occasion but its influence in controlling oil
prices dropped considerably since 1973. It was proven that, having quadrupled the price of oil,
OPEC had in its hands the power to inflict economic hurt on the rich countries. (Beenstock 2007, p.
134) Although OPEC does not completely control the oil market today, it nevertheless continues to
be influent because its decisions to reduce production may lead to either a decrease or increase of oil
prices. OPEC's existence is dependent on the future of oil. Whether or not oil will dominate as the
main energetic source for worldwide economy will decide its future. Considering that OPEC's oil
has been a vital source of energy during the last half of century, (Khusanjanova 2011, p. 19) and that
oil is expected to play a similar role within the next century, we can assume the organization will at
least maintain its

Environmental Consequences Of Fracking
The various ties between the Organization of Petroleum Exporting Countries and the United States
of America has always ebbed and flowed. American–OPEC relations have been strained by events
such as the increase in oil prices in 1973 in retaliation of the American support of Zionist terrorists
that the U.S. would call "Israel", but now, the various economies of OPEC nations themselves could
be under threat.
The United States of America has invested more energy and resources into more expensive and
more controversial methods of obtaining oil and natural gas such as horizontal drilling and hydraulic
fracturing– the latter commonly known as fracking. However, the emerging American industry also
poses severe political and environmental consequences.

Opec Is An International Organization
OPEC is an international organization that formed in September of 1960. OPEC headquarters reside
in Vienna, Austria, however they are a collective representation of 13 different oil–exporting
nations. Over its lifetime, it has conjured many different interpretations of its effect in the oil world.
Some views determine that OPEC does not have a significant effect on oil prices or market
dynamics but instead the worldwide competitive market. Another view concludes that OPEC uses
their power to monopolize the market. The Organization of the Petroleum Exporting Countries
(OPEC) has currently thirteen member countries. OPEC is an international organization that unifies
petroleum policies of its member in order to keep a stable oil markets, so that consumers have
efficient supply, producers have a consistent income, and investors have a reasonable return on
capital. OPEC supplies a large amount of the world demand for crude oil. This can affect the crude
oil prices in the world market.
In general this study looks at how relevant is OPEC. In regards to oil production, setting oil prices in
the world oil industry, and OPEC's market shares and market power. In addition to studying, the
relevance of OPEC, this study will examined that factors if any, that have made OPEC less relevant
in terms of oil production and market oil prices.
HISTORY
The international organization was originally formed in September 1960 by five oil producing
countries; Venezuela, Saudi Arabia, Iraq,

Economics Assignment : Lachlan Milligan
ECONOMICS ASSIGNMENT Lachlan Milligan Ever since 2014 crude oil prices have been
decreasing dramatically, this has contributed to various global economic issues that has the potential
to destabilise the economy.There are various factors which contribute towards these issues where the
result has a negative effect on Australian industries. In order to prevent the ever decreasing crude oil
prices, the Australian government needs to implement new policies and legislation which could
assist to mitigate the impact of fluctuating oil prices within the economy. By doing so, there would
be a positive effect on the Australian economy which could help restabilise the global economic
situation. Part A Graph 1 (Deloitte, 2016), Oil suppliers versus Oil prices History of Crude Oil Price
Graph 1 represents the major companies and nations which product crude oil. It also represents how
the bent crude oil price has fluctuated from 2004 until 2014. From 2004–2008 it is evident that there
is a steady rise in oil prices, from $35–$150 per barrel. Towards the end of 2008 it is evident that
there is a significant drop in oil prices, from $150– $32 per barrel. This is due to the Global
Financial Crisis (GFC) where the stock market collapsed on October 28, 1928, through this came
the rapid decrease in oil prices. From 2009–2011 there is a steady increase in oil prices which was
caused by the stock market repairing itself from impact of the GFC. In 2013 we are able to see
declining oil

Competitive Enviroment Of World Oil Markets
COMPETITIVE ENVIROMENT IN WORLD OIL MARKETS
OPEC Has Been Waring Its Role on Oil Markets
The largest organization to control and impact oil suppliers is the Organization of the Petroleum
Exporting Countries (OPEC), an entity which associates with13 countries: Algeria, Angola,
Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab
Emirates and Venezuela. The mission of OPEC is to coordinate and unify the petroleum policies of
its Member Countries and in order to ensure the fair and stabilization of oil markets. OPEC controls
oil prices through its pricing–over–volume strategy. According to Foreign Affairs magazine, the oil
embargo shifted the structure of the oil market from a buyer 's to a seller 's market.
During the 1970s, it was Golden age for OPEC. Due to Arab oil embargo in 1973 and he outbreak of
the Iranian Revolution in 1979, after ten years in taking control internationally, OPEC had rose its
influence by stabilizing the crude oil price on world market.
Since 1970s, due to the shortages of oil supply and internationally increasing price of oil, old oil–
consuming countries, especially OECD countries, encouraged of improving energy efficiency and
developed alternative energy sources, mainly coal and natural gas, to reduce crude oil demand.
Moreover, because of increasing oil prices, Non–OPEC countries, such as Russia, the United States
and China had growth desires for oil investment. Therefore, Non–OPEC countries' oil proven

Economic Growth And Saudi Arabia
Economic Growth in Saudi Arabia
Saudi Arabia has an economy that is largely dependent on oil, with the government maintaining the
biggest control over the country 's significant economic activities. Saudi Arabia owns about 16% of
the global oil reserves and is the number one exporter of oil (Saudi Arabia, 2013). In addition, the
Kingdom of Saudi Arabia was instrumental in the formation of the OPEC (Organization of the
Petroleum Exporting Countries) group, which initially comprised Iraq, Venezuela, Iran, Kuwait and
Venezuela (Energy indicators, 2004). Currently, the petroleum industry constitutes about 80% of the
country 's budgetary incomes; about 40% of the country 's GDP and 87% of Saudi 's export earnings.
Agriculture, in addition to petroleum products, has been a major contributor to the kingdom's
economy since 1970s (Saudi Arabia, 2013). The country has been able to produce enough
agricultural products for their consumption as well as surplus for exportation to the GCC member
countries.
Saudi 's Pattern of Economic Growth
Initially, Saudi Arabia was largely a subsistence economy, gaining its revenues from subsistence
agriculture and sale of natural resources. The Saudi population was highly dependent on subsistence
farming and was very poor, given that climatic conditions in Saudi Arabia are not favourable for
food production. However, the situation drastically changed when oil was first discovered in 1930 's.
Although a highly sought after commodity, oil prices were

Opec Case Study
BE – Group Assignment
Group No – 15 Centre – Thane OPEC Case Study Course – IIFT EPGDIB ( Vsat) 2009
Participants :1) Dinesh Jhamnani 3) Neelesh Naik 5) Koshy John 2) Anup Nair 4) Prashant Lohade
6) Smita Meshram
What is OPEC? The Organization of the Petroleum Exporting Countries (OPEC) is a permanent
intergovernmental organization of 12 oil–exporting developing nations that coordinates and unifies
the petroleum policies of its Member Countries. It was founded at a meeting held on 10–14
September 1960 in Baghdad, Iraq, by five oil–producing countries: Iran, Iraq, Kuwait, Saudi Arabia
and Venezuela. (These countries are referred to as the Founder Members of the Organization) This
unified front was created primarily in response to ... Show more content on Helpwriting.net ...
Price war became so nasty between the Sisters and Russia that at one point the crude price of
Russian oil was almost the half of the posted price of sisters. To overcome their loss, British
Petroleum took the chance by reducing posted price by 18 cents, which triggered the already angry
host governments' resentment Towards the Sisters. Then again on August 9, 1960 Monroe
Rathbone's (Chairman of Standard oil of New Jersey) suggested another price cut from the posted
price without even consulting the host nation. This cut was another 14 cents; this really made the
Middle Eastern countries furious. Scarcely a month after Rathbone's blustering move, representative
of five countries that collectively produced 80 percent of the world's oil– Iraq, Iran Kuwait, Saudi
Arabia and Venezuela–gathered in Baghdad, a four day conference gave birth to the OPEC.
Organization of Petroleum Exporting Countries (OPEC) on September 14' 1960. The groups'
mission was to defend the price of oil and win a bigger share of petroleum revenues. Thereafter,
OPEC was augmented by Qatar in 1961, Indonesia and Libya in 1962, UAE in 1967, Algeria in
1969, Nigeria in 1971, and Ecuador and Gabon in 1973. OPEC was composed of thirteen members
prior to the first oil crisis in 1973. Ecuador and Gabon left OPEC later in 1993 and 1995,
respectively. What is an Oligopoly Market Structure? An oligopoly is a market form in which a
market or industry

The United States Economy As The Global Economy
From 2010 until the end of 2014 oil prices remained relatively constant. With very little fluctuation
over these four years, the average price per barrel of oil was around 110 dollars. That price has been
more than cut in half within the past year. The price for United States crude oil is now just 48 dollars
a barrel, the lowest it has been since 2009 (BBC News). So what is the cause for this sudden change
and to what effect will this have on the United States' economy as well as the global economy?
There are three core contributors that account for this sudden dip in oil prices. These contributors are
a low demand for oil in many countries, specifically Europe, that is caused by a lack of economic
growth, the increase in The United States' oil production, and The Organization of the Petroleum
Exporting Countries (OPEC) increase in oil production. With many of Europe's economically
struggling countries the increase in production of oil which in return yields lower prices has
benefitted them. Europe's weak economy is able to contribute to this drop in oil prices in that
Europe's currently low inflation rate and weak economy has greatly lessened the demand for oil. The
lack of demand for oil in one of the most prominent import continents in the world has forced oil
manufactures to lower their prices in order to retain Europe as a top oil export. Large oil exporters
do not want to lose Europe as an export because that would also mean losing billions of dollars per
year.

Please Read Chapter 10 and Answer the Following Questions:
Please read chapter 10 and answer the following questions:
1. (Varieties of Oligopolies) do the firms in an oligopoly act independently or interdependently?
Explain your answer.
2. (Price Leadership) why might a price–leadership model of oligopoly not be an effective means of
collusion in an oligopoly? * Price leadership practices violate US anti–trust laws. * The more
differentiated the product is, the less effective price leadership is as a means of collusion. * There is
no guarantee firms will follow the leader forcing the leading firm to reduce prices. * Cheating may
occur. * A new entry can destabilize the price leader's position...
–If a price leader in an oligopolistic market sets price and output in order ... Show more content on
Helpwriting.net ...
If both students sign the statement, each will receive an "F" for the course. If only one signs, he is
allowed to withdraw from the course while the other student is expelled. If neither signs, both
receive a "C" since the professor does not have sufficient evidence to prove cheating. Which
outcome do you expect? Why?
* Prisoners' Dilemma...
* In this case, both students will probably confess if they're coherent about life. Why? Because each
Student gets a better payoff by confessing no matter what the other the student does. Student #1
thinks, "I don't know what student # 2 is going to do, so if I confess it's the best way to keep myself
from getting expelled. If he keeps quiet, I get a "C". Yet if he confesses, I get expelled instead of
receiving an "F" for the course." In other words, confessing is the only way to keep the other
Student from being able to get me expelled.
5.(Market Structures) Determine whether each of the following is a characteristic of perfect
competition, monopolistic competition, oligopoly, and/or monopoly:
a. A large number of sellers /... Perfect competition
b. Product is a commodity.../ Government Monopoly (Utility)
c. Advertising by firms.../ Oligopoly
d. Barriers to entry... / Monopoly

e. Firms that are price makers.../a monopoly is a price maker as it holds a large amount of power
over the price it charges.
6. OPEC is the

OPEC Powerpoint Presentation
Discussion of OPEC PowerPoint An effective PowerPoint presentation uses language in a pithy and
compelling manner. The more complex the subject, the more pointed the prose of the presenter
should be. Unfortunately, the PowerPoint entitled "OPEC" by Jeremy Hall takes an already–
complex subject matter (an overview of the OPEC organization) and renders it even more
challenging to the listener by presenting the material in a dense, verbally–heavy manner. The first
slide of the presentation does not visually convey what OPEC actually is it merely presents a map of
the world highlighting the member countries. Unless someone knows that OPEC is a Middle East–
based oil cartel, with some member nations in other areas, this graphic will seem meaningless. A
graphic depicting something related to oil is essential to convey the nature of OPEC to the reader.
Also, the graphic should be more visually arresting, to grab the viewer's attention. There is also no
following title slide conveying the author's name, date, and reason for the presentation. PowerPoints
are ultimately visual guides. The speaker fleshes out in words the visuals and punchy, bullet–pointed
lists of words and facts on the PowerPoint. However, the first slide entitled 'Background
Information' reads like a transcript of speaker's notes, rather than a visual depiction of the subject
matter designed to support the speaker's lecture. There also is no picture to underline the material
being presented. Instead of writing:

Jack Janik . Micro Economics. 1:00 Class. 4/28/17. Opec
Jack Janik
Micro Economics
1:00 Class
4/28/17
OPEC and the Oil Market
Oil is a limited commodity with an unlimited demand. Very few nations have the luxury of having
their own supply to which they can fulfill their own needs, while other countries clamour for what
they can get . The countries with oil realized instead of competing with one another on exports , it
would be much more profitable to simply work together and cooperate in their production of oil,
rather than compete. In doing this, these countries will then be able to influence the market
magnitudes more.
The first steps towards forming the Organization of the Petroleum Exporting Countries, (OPEC)
began in 1949. Venezuela and Iran contacted Iraq, Kuwait and Saudi Arabia about ... Show more
content on Helpwriting.net ...
(OAPEC) is composed by Saudia Arabia, Algeria, Bahrain, Egypt, United Arab Emirates, Iraq,
Kuwait, Libya, Qatar, Syria, and Tunisia. The organization placed an embargo on the USA over their
support of Isreal in the Yom Kippur War. This is an example of economic warfare which allowed
them to express their outrage and disagreement with USA without declaring war. They simply use
economic measures to stifle the economy of their enemies. The same tactic was implemented when
Russia invaded Ukraine recently as well, leading to their currency's significant inflation.
The result of the embargo was the oil crisis of 1973, during this period in time the cost of oil
increased dramatically, In the United States, prices went from $3 a barrel to $12 a barrel. This tactic
was repeated numerous times thus the oil countries continued in successfully harming the US
economy. In 1979, an oil crisis occurred, Iran had a revolution which lead production to decrease,
though it was only only marginally . However, due to mass speculation of price increases and
shortages, many people started buying more to stock up which lead prices to inevitably skyrocket
once again.
After 1980, oil prices decreased for first time in twenty years. As the 90s approached, oil exporting
countries expanded production. The USSR became the top producer, and the US ramped up alaskan
oil, causing a loss of power for OPEC. One may wonder what exactly is OPEC and who

Demand Of Oil Producing Countries
The very first international agency created to allow oil–producing countries to achieve their
economic objectives was OPEC. The organization was modeled after the Texas Railroad
Commission and formed at the Baghdad Conference in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and
Venezuela . The founding five counties were later joined by Qatar, Indonesia, Libya, the United
Arab Emirates, Algeria, and Nigeria . At the time of its creation most industrial countries were
immensely dependent on the oil imported from the region of the world represented by the OPEC
members. Nonetheless, the member countries had yet to devise a workable system for responding to
serious disruptions in oil supply before OPEC. OPEC's purpose was to serve as a sort of cartel. It
would "co–ordinate and unify petroleum policies among Member Countries, in order to secure fair
and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to
consuming nations; and a fair return on capital to those investing in the industry."
During the 1960s, OPEC was only modestly successful in influencing oil prices, which remained
relatively stable. OPEC member counties did not gain control of their own oil production decisions
until the 1970's because oil companies had a large stock, and therefore a proportionately large say, in
many of the OPEC countries' oil production businesses. During the period of 1969–1972, OPEC
countries began setting barrel prices without negotiation with the

Opec Is Used For The Organization Of Petroleum Exporting...
OPEC is abbreviation used for the Organization of Petroleum Exporting Countries. It is an
intergovernmental and permanent organization which came into force in Baghdad in September
1960. Initially formed by the Five Founding members – Iran, Iraq, Kuwait, Saudi Arabia and,
Venezuela, it was later joined by 9 other countries which are Qatar, Libya, UAE, Algeria, Nigeria,
Angola, Gabon, Indonesia and Ecuador. The organization's headquarters were first located in
Geneva, Switzerland for the first five years but were later moved to Vienna, Austria in 1965.
This organization was created to synchronize the petroleum policies of its members and to provide
the member states with aid and support economically and technologically. OPEC is basically an
association that focuses on managing the supply of oil in an attempt to set and control the oil prices
in the market all around the world. It is also done to avoid the instabilities that might directly or
indirectly affect the economies of the member countries who both procure or create oil.
Its main objective is to coordinate and unify petroleum policies among member nations to secure
genuine and constant prices for petroleum producers, an efficient, economic and stable supply to
consuming nations, and a fair return of capital to investors in the industry.
(OPEC, 2016)
CENTRAL ARGUMENT:
In 1970s, OPEC achieved international distinction as the members of this cartel, gained a major role
in the price fixing of crude oil, majorly

The Low Price Of Oil

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