World oil price increases: sources and solutions

Journal Article · Wed Oct 01 04:00:00 EDT 1980 · Energy J.; (United States)

DOI:https://doi.org/10.5547/ISSN0195-6574-EJ-Vol1-No4-4· OSTI ID:7048483

Danielsen, A L; Selby, Jr, E B

The world crude oil and petroleum products delivery system is outmoded because the consuming countries no longer control enough unutilized capacity to moderate Organization of Petroleum Exporting Countries (OPEC) prices, but Western institutions have not been modified to deal with the changed environment. An outline of the short-term and long-term processes for determining crude oil price and supply shows that the market conditions were changing in the '60s and '70s as inventory policies changed. The consuming nations made inadequate responses in forming the International Energy Association (IEA) and the Strategic Petroleum Reserve (SPR) because they are associated with political crises and tend to build inventories when prices are rising. The US, as the leading consumer, could reverse these policies with direct ownership of buffer stocks by a Federal Energy Reserve Board and by promoting, either by regulation or incentive taxes, private inventory building. A cooperative international effort would spread the cost of this approach. 13 references. (DCK)

• Research Organization: Univ. of Georgia, Athens
• OSTI ID: 7048483
• Journal Information: Energy J.; (United States), Journal Name: Energy J.; (United States) Vol. 1:4; ISSN ENJOD
• Country of Publication: United States
• Language: English

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