What about the OPEC Cartel?

Daniel Huppmann and Franziska Holz

No 58, DIW Roundup: Politik im Fokus from DIW Berlin, German Institute for Economic Research

Abstract: The recent decision by the Organization of the Petroleum Exporting Countries (OPEC) not to decrease their output quota in spite of a drastic decline of crude oil prices has brought renewed attention to this supplier group dominating the crude oil market. However, the empirical evidence that OPEC truly acts as a textbook cartel is rather limited. This Roundup summarizes the theories proposed over the past decades to explain the fundamental structure of the crude oil market and the role of OPEC and Saudi Arabia, the pivotal supplier. The consensus in the academic literature points towards the interpretation that the group is acting as a non-cooperative oligopoly. We relate the theories to alternative interpretations of the price drop over the autumn of 2014.

Pages: 6 p.
Date: 2015
New Economics Papers: this item is included in nep-ara and nep-ene
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Citations: View citations in EconPapers (10)

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