OPEC: Power in the Oil Industry Analytical Essay by Nicky

OPEC: Power in the Oil Industry
An analysis of the development of the Organization of Oil Producing Countries (OPEC) as a market driver in the oil industry.
# 148891 | 1,466 words | 7 sources | APA | 2011 | US
Published on Nov 12, 2011 in Business (Industries) , Business (International)

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This paper offers a brief look at the economic picture of OPEC oil producing member nations, and then explores some of the reasons for the dominance and unlimited power of the OPEC. The paper explains the role of market share, the limited impact of alternatives and the politics of them and the support and standard set by other players in the market. The paper includes several color graphs and a table.

Economic Picture of OPEC
Reasons for Dominance

From the Paper:

"Economically, to a large degree the organization acts as a business, as it seeks profitability and attempts to ensure continual growth, with little thought of the consumer at the other end of the market situation. The goal of the OPEC, from its very start was to ensure that its member nations were not unfairly manipulated by foreign interests in the oil market, which was the trend prior to its inception in 1960. ("Oil Industry," 2007) The preceding graph demonstrates both the market share OPEC nations hold on the oil industry as well as the growth of OPEC's dominance over the prices of oil. In short OPEC makes every attempt to produce profit, no matter the nature of demand or in a way that is dependant upon other supplier nations.
"The Free on Board (FOB), price, determined entirely by OPEC is the number of significance in this scenario, as this is the actual price that oil companies pay to receive OPEC oil onto their vessels, for transport to a refinery or holding station. This price is determined almost exclusively by the seller, in this case OPEC and can vary by real price and demand to such a degree that it always favors the supplier and gives little concern for the consumer or the middle men."

Sample of Sources Used:

  • Oil Industry. (2007). In The Columbia Encyclopedia (6th ed.). New York: Columbia University Press.
  • Falola, T., & Genova, A. (2005). The Politics of the Global Oil Industry: An Introduction. Westport, CT: Praeger.
  • Harford, T. (2006). The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--And Why You Can Never Buy a Decent Used Car!. New York: Oxford University Press.
  • Kaplan, P. (1998, June 30). OPEC to Pump Less Oil to Raise Prices. The Washington Times, p. 8.
  • Moore, J. B. (2003). The Natural Law Basis of Legal Obligation: International Antitrust and OPEC in Context. Vanderbilt Journal of Transnational Law, 36(1), 243.

Cite this Analytical Essay:

APA Format

OPEC: Power in the Oil Industry (2011, November 12) Retrieved January 25, 2022, from https://www.academon.com/analytical-essay/opec-power-in-the-oil-industry-148891/

MLA Format

"OPEC: Power in the Oil Industry" 12 November 2011. Web. 25 January. 2022. <https://www.academon.com/analytical-essay/opec-power-in-the-oil-industry-148891/>