Understanding OPEC: An Economic Analysis Essay -- Oil Economics Econom

Understanding OPEC An Economic AnalysisIn the last few months, much has been said of Iraqs invasion of capital of Kuwait in 1990. Interestingly enough, one of Iraqs motivating factors was economics. Kuwait provided Iraq with a pretext for war as it violated the economic policies of the Organization of Oil-Exporting Countries by exporting vegetable oil above its quotas. This is but one chapter in the tangled history of OPEC. OPEC is an international assembly of nations which co-ordinates and unifies the petroleum policies of eleven countries and has enjoyed the highs and weathered the lows of oil prices in the last few decades. To solve their problems, both member countries and oil-importing countries essential address the complex nature of oil price elasticity in making their policy decisions.An analysis of OPECs policies demands a cursory round off of its history and the recent and current structure of the oil market. Acting in concert, OPECs eleven member countries set per coun try quotas for oil action to limit the oil supply. It seeks to co-ordinate and unify their petroleum policies in ordain to promote stability and harmony in the oil market (OPEC 2). In other words, OPEC seeks to secure a long-term profitable stream of income for OPEC members by exploiting its market power in an oligopoly.OPEC has commanded tremendous market power in the oil industry ever since Iran, Iraq, Kuwait, Saudi Arabia and Venezuela founded it on September 14, 1960. Today, the rate of member countries has risen to 11 and now includes Algeria, Indonesia, SP Libyan AJ, Nigeria, Qatar, and the United Arab Emirates. Together, these countries extradite pooled their tremendous resources OPEC Members Countries produce about(predicate) 41 per cent of the worlds crude oi... .... 2000. Organization of the Petroleum Exporting Countries. 19 April 2003 .Answers to frequently asked questions about the petroleum industry. 2000. Organization of the Petroleum Exporting Countries. 19 Apri l 2003 .Foreman, Gary. Use the uprightness to Save Thousands. Soho America. 19 April 2003 www.soho.org/Finance_Articles/Spply_and_Demand.htm.Hwang, M. J. and C. W. Yang. Unstable Price Elasticity and High realism Oil Prices. October 2001. The 52nd International Atlantic Economic Conference. 19 April 2003 www.iaes.org/conferences/past/philadelphia_52/prelim_program/d00-1/index.htm.Taylor, Jerry. No Need to Panic over Oil Prices Dont call up the Politicians Rhetoric. 2003. Cato Institute. 19 April 2003 .