Oil sharing and policy coordination: The implications for developing countries
The major program of response to energy emergencies inherited from the 1970s is the International Energy Program (IEP) of the International Energy Agency (IEA). The central feature of the IEP is a system of oil sharing, to be triggered by oil supply cutoffs of 7% or more to individual member countries or the group as a whole. In assessing the effectiveness and desirability of the IEP, an empirical study of the contemporary world oil market indicates that it adjusts equally well in disrupted and normal circumstances. Less developed countries and other nonparticipants are thus likely to experience without delay the effects of oil supply disruptions as well as any effects, positive or negative, of sharing among IEA members. Assessment of the sharing program indicates that import quotas, which could be imposed by countries whose ''supply rights'' under the program require them to limit their consumption of oil, could, in the presence of even a small degree of oligopoly production, result in perverse increases in the world price of oil. Prices would be pushed in a downward direction, however, if sharing were to be only partially implemented, with members entitled to receive oil failing to exercise their rights. LDCs, along with all trading countries, would experience these price changes. It is doubtful that membership in the IEA, should it ever be offered, would confer net benefits on LDCs. Their demand elasticities are more likely to make them donors of oil than recipients in a disruption. The lack of accumulated oil stocks makes LDCs especially vulnerable to the need to impose domestic price ceilings and mandatory allocations on general petroleum use as part of the attempt to fulfill their sharing obligations. 18 refs., 2 tabs.
- Research Organization:
- Oak Ridge National Lab., TN (USA)
- DOE Contract Number:
- AC05-84OR21400
- OSTI ID:
- 6625919
- Report Number(s):
- CONF-8811120-1; ON: DE89003931
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
290200 -- Energy Planning & Policy-- Economics & Sociology
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
294002* -- Energy Planning & Policy-- Petroleum
DEMAND
DEVELOPING COUNTRIES
EMERGENCY PLANS
ENERGY DEMAND
ENERGY MANAGEMENT
ENERGY SHORTAGES
ENERGY SOURCES
ENERGY SUPPLIES
FOSSIL FUELS
FUELS
INTERNATIONAL ENERGY AGENCY
INTERNATIONAL ORGANIZATIONS
MANAGEMENT
MARKET
PETROLEUM
PETROLEUM PRODUCTS
SHORTAGES