Economic analysis of Western cooperation on oil: 1974-1980

Thesis/Dissertation · Fri Jan 01 04:00:00 EST 1982

OSTI ID:5755297

Larson, A P

Western cooperation on oil in the International Energy Agency (IEA) began as an effort to deter future selective oil embargoes and predatory OPEC pricing. Later, cooperation was extended to include more-general emergency-preparedness measures and collective efforts to reduce oil imports. Economic theory suggests that cooperation will lead to a more nearly optimal level of oil imports and oil stocks than action taken solely on a national basis. Nevertheless, the experience of the period between 1974 and 1980 demonstrates that cooperation is difficult to achieve. IEA countries made little progress in building oil stocks and implementing oil-import-reduction policies. They were unprepared for the Iranian oil-supply interruption and failed to take sufficiently effective steps to mitigate the effects of the interruption. A case study with several appendices reviews the agreements reached in the IEA and at annual economic summit meetings and details an evolution toward national oil-import targets a means of enforcing the discipline of oil-importing nations. Closer cooperation in oil-import reduction was slowed by burden-sharing problems. The study recommends policy measures that would enhance Western cooperation. These include market pricing and free trade of fuels, increased national oil and gas stocks, and a method of encouraging more flexible use of stocks during supply interruptions too small to trigger the formal IEA sharing system.

• OSTI ID: 5755297
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
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ALLOCATIONS
COOPERATION
ENERGY SOURCES
FOSSIL FUELS
FUELS
INTERNATIONAL ENERGY AGENCY
INTERNATIONAL ORGANIZATIONS
PETROLEUM
STOCKPILES