OPEC's investments and the international financial system

Technical Report · Tue Jan 01 04:00:00 EST 1985

OSTI ID:5457471

Mattione, R P

Few events of the past decade have affected the global economic and political landscape as much as the sharp increase in the price of oil in 1973-74 and again in 1979-80. The massive transfer of real resources from mostly Western oil-consuming nations to oil-producing countries, especially to members of the Organization of Petroleum Exporting Countries, raised widespread fears that actions of OPEC nations could disrupt world financial markets, that oil markets and energy supplies would become unstable, and that a significant shift of political power would increase international tensions. In this study of how OPEC nations have used and learned to invest their wealth, Richard P. Mattione shows that the fears, have not in any significant way been realized. Mattione is the first to analyze in detail the size and distribution of the investments, their effects on the international financial system, and the motivations behind each OPEC member's investment strategy. Analyzing hard-to-find data from a variety of sources, he argues that investments in the United States and elsewhere have been motivated at least as much by conventional financial considerations - the need for liquidity, diversification, safety, and adequate rate of return - as by oil policy, development policy, or political considerations. He also traces the growth of these countries' abilities to absorb funds through internal development, their growing sophistication in financial planning and in moving Arab banks into international financial markets, and their mixed success in using aid to Third World countries to further their foreign policy goals. The book concludes with an analysis of the interplay of oil prices and policy, development needs, and financial strategies and their implication for the investments of each OPEC member in the 1980s. 33 tabs.

• Research Organization: Brookings Institution, Washington, DC (USA)
• DOE Contract Number: AC01-80PE70267
• OSTI ID: 5457471
• Report Number(s): DOE/PE/70267-T46; ON: TI85016741
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
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& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
ECONOMIC DEVELOPMENT
ENERGY SOURCES
FOSSIL FUELS
FUELS
GLOBAL ASPECTS
INSTITUTIONAL FACTORS
INTERNATIONAL ORGANIZATIONS
INVESTMENT
MARKET
OIL-EXPORTING COUNTRIES
OPEC
PETROLEUM
POLITICAL ASPECTS
PRICES