Abstract
Conventional wisdom has held, until the dramatic oil price collapse of late 2014, that OPEC has the world’s consumers in its grasp and that it can manipulate prices by tinkering with its own supplies. The events of late 2014 has proved conventional wisdom to be wrong, for it has shown that indeed “the Emperor has no clothes.” As discussed in an earlier chapter, OPEC for the most part has seen its actions or more precisely OPEC decisions, lagging behind fundamental changes in oil supply and demand and a new energy paradigm when assessing the rise of shale oil from non-OPEC countries. The events of 2014 can be viewed as a watershed in OPEC’s perceived control of world prices which demonstrated that instead of being a masterful and controlling cartel, OPEC was in fact now riding out events, hoping for the best in terms of eventual oil price recovery.
Better bend than break.
Scottish Proverb.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Aissaoui, A. (2014a) “OPEC in the Future: Will it Continue to Play a Pivotal Role?”. APICORP Research, Economic Commentary. 9 (10). October 2014.
Aissaoui, A. (2014b) “Revisiting the Dynamics of the Forward Crude Oil Price Curve”. APICORP Research, Economic Commentary. 9(11). 11 November 2014.
Al Fathi, S. (1990) “Relations Between OPEC and Non-OPEC Oil Producers”. OPEC Review. 14 (1). Spring.
Al Nasrawi, A. (1985) “OPEC in a Changing World Economy”. John Hopkins University, Baltimore, USA.
Al Saif, Waleed. (1996) “OPEC Quota System”. Ph.D. Thesis, Claremont Graduate School, USA.
Arab News. (2014a) “Al Naimi: OPEC ‘Must Combat US Shale Boom”. Arab News, Jeddah. 29 November 2014.
Arab News. (2014b) “No Conspiracy behind Oil Price Fall: Al Naimi”. Arab News, Jeddah, 22 December 2014.
Arab News. (2014c) “OPEC will not cut Output even at $20”. Arab News, Jeddah, 24 December 2014.
Bloomberg Businessweek. (2014) “Why Russia Said ‘No Deal’ to OPEC on Cutting Oil Production”. Bloomberg Businessweek. 27 November. 2014.
Bloomberg. (2014c) “Iraqi-Kurdish Accord Lifts Exports, Blunts OPEC Quota: Bear Case”. Bloomberg, 3 December 2014.
Bloomberg. (2014d) “Oil Rebounds as Libyan Conflict Offers Relieve From Global Glut”. Bloomberg, 29 December 2014.
Bochem, S. (2004) “Cartel Formation and Oligopoly Structure: A New Assessment of the World Crude Oil Market”. Applied Economics. 36. pp. 1355-69.
BP. (2014) “Statistical Review of World Energy”. June 2014. www.bp.com .
Business Monitor International. (2013) “Latin America Monitor—Brazil Business Fundamentals”. October 2013 Analysis.
Chalabi, F. (1980) “OPEC and the International Oil Industry: A Changing Structure”. Oxford University Press.
Chalabi, F. (1989) “OPEC at the Crossroads”. Oxford: Pergamon Press.
Chalabi, F. (2010) “Oil Policies, Oil Myths: Analysis and Memoir of an OPEC Insider”. Tauris Press, UK.
Claes, D. H. (2001) “The Politics of Oil-Producer Cooperation: The Political Economy of Global Interdependence”. Westview Press, USA.
Colgan, J. (2012) “The Emperor has no Clothes: The Limits of OPEC in the Global Oil Market”. Retrieved from www.uni-heidelberg.de/md/awi/peio/colgan_13.09.2012.pdf .
Cremer, J. and Isfahani, D. (1991) “Models of the Oil Market”. Chur: Harwood Academic Publishers.
Cuervo, L. (2008) “OPEC from Myth to Reality”. Houston Journal of International Law. 30 (2). pp. 433-541.
Currie,J, Natuan, A, Creedy, D. and Courralin, D. (2010) “Commodity Prices and Volatility: Old Answers to New Questions”. Goldman Sachs. Global Economics Paper. 194. pp. 1-44. 30 March.
Dahl, C. and Yucel, M. (1991) “Testing Alternative Hypothesis of Oil Producer Behavior”. The Energy Journal, 12, pp. 117-37.
Fattouh, B. (2006) “The Origins and Evolution of the Current International Oil Pricing System: A Critical Assessment” in Mabro, R,(ed) “Oil in the 21st Century: Issues, Challenges and Opportunities”. Oxford University Press.
Gately, D. (1979) “OPEC Pricing and Output Decisions”. Applied Game Theory. Physica-Verlag, Germany.
Griffin, J.M. (1985) “OPEC behavior: A Test of Alternative Hypothesis”. The American Economic Review. 75, pp. 954-63.
Hansen, P.V, and Lindhollt, L. (2008) “The Market Power of OPEC: 1973-2001”. Applied Economics. 40, pp. 2939-2959.
IEA. (2013) “World Energy Outlook 2013”. International Energy Agency, OECD, Paris. 12 November 2013. www.iea.org.
IEA. (2014) “World Energy Outlook 2014”. International Energy Agency, OECD, Paris. 12 November 2014. www.iea.org.
Mabro, R. (1989) “OPEC’s Production Policies”. O.I.E.S. Paper. Oxford: Aldgate Press.
Mabro, R. (ed) (1986) “OPEC and the World Oil Market: The Genesis of the 1986 Price Crisis”. Oxford University Press, UK.
Moguera, P, Douglas, C, and Herrera, A. (2011) “Testing for Cartel in OPEC: Non-Cooperative Collusion or Just Non-Cooperative?”. Oxford Review of Economic Policy. 27(1). pp. 144-168.
Noreng, O. (1978) “Oil Politics in the 1980’s: Patterns of International Cooperation”. McGraw Hill, New York.
Noreng, O. (1982) “Friends or Fellow Travelers? The Relationship of Non-OPEC Exporters with OPEC”, in Mallakh, R. (ed) “OPEC: Twenty Years and Beyond”. Westview Croom Helm.
OPEC. (1990) “Official Resolutions and Press Releases 1960-1990”. OPEC, Vienna. The Secretariat of the Organization of Petroleum Exporting Countries.
Prokop, J. (1999) “Process of Dominant-Cartel Formation”. International Journal of Industrial Organization. 17. pp. 241-57.
Roeber, J. (1994) “Oil Industry Structure and Evolving Markets”. Energy Journal. 15 (Special Issue). pp. 253-276.
Rudnitsky, J. and Chmaytelli, M. (2015) “OPEC must Accept New Reality of Oil Price Below $100: EL Badri”. Bloomberg. 9 June 2015.
Skeet, I. (1988) “OPEC: Twenty Five Years of Press and Politics”. Cambridge University Press, Cambridge.
Smith, J. (2005) “Inscrutable OPEC: Behavioral Test of Cartel Hypothesis”. Energy Journal. 26. pp 51-82.
Sykuta, M. (1994) “Real Effects of Futures Market on Firm and Industry Behavior: A Study of Institutions and Contracting in the Crude Oil Industry”. Ph,D, Washington University. Department of Economics. St Louis. MO.
Tamimi, N. (2013) “Brazil: The Future Energy Superpower”. 19 Nov. 2013. http://english.alarabiya.net/en/views/business/economy/2013/11/15/Brazil
Wilpert, G. (2007) “Changing Venezuela: The History and Politics of the Chavez Government”. Verso, London.
Yergin, D. (2011) “The Quest: Energy, Security and the Remaking of the Modern World”. Penguin Press, New York.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Ramady, M., Mahdi, W. (2015). A False Dawn: Myths and Realities of OPEC’s Power. In: OPEC in a Shale Oil World. Springer, Cham. https://doi.org/10.1007/978-3-319-22371-1_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-22371-1_3
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-22370-4
Online ISBN: 978-3-319-22371-1
eBook Packages: Business and EconomicsEconomics and Finance (R0)