Oil prices and the future of OPEC: the political economy of tension and stability in the Organization of Petroleum Exporting Countries

Book · Sun Jan 01 04:00:00 EST 1978

OSTI ID:6276503

Moran, T H

The assumption embodied in the conventional approach to modeling OPEC behavior is that the question of the internal distribution of the OPEC market will not cause tension among the members because most of the largest potential exporters do not need the revenues and is justified for some level of earnings from oil exports. Above some threshold of petroleum income, Saudi Arabia, Abu Dhabi, Juwait, Libya (even Iraq and Iran) will be indifferent as to whether they have to forego some added increment of revenue. In OPEC, though, some range of lower revenues means giving up some item (a desalination plant, a fertilizer project, etc.) that constitutes a sacrifice. A schematic is shown to represent this problem. The first section of this study attempts to sketch the marginal utility curve for energy revenues for the OPEC countries, especially Saudi Arabia, Iran, Iraq, and Venezuela. The second section, then, matches these estimates of the aggregate revenue needs against alternative projections of demand for OPEC exports, thus establishing how easy or difficult the balancing problem will be for OPEC at various oil price levels. The final section suggests which hypotheses about OPEC behavior are more, and less, plausible for the future, and discusses the policy implications for oil-importing states. (MCW)

• OSTI ID: 6276503
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
021000 -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
AFRICA
ALGERIA
ASIA
CARTELS
COMPETITION
DECISION MAKING
ECONOMIC POLICY
ECONOMICS
ECUADOR
ENERGY SOURCES
EVALUATION
EXPORTS
FORECASTING
FOSSIL FUELS
FUELS
GABON
GOVERNMENT POLICIES
INCOME
INDONESIA
INTERNATIONAL COOPERATION
INTERNATIONAL ORGANIZATIONS
IRAN
IRAQ
KUWAIT
LATIN AMERICA
LIBYA
MIDDLE EAST
NIGERIA
OIL-EXPORTING COUNTRIES
OPEC
PETROLEUM
PRICES
SAUDI ARABIA
SOUTH AMERICA
VENEZUELA