OPEC: What Difference Has It Made?

Bassam Fattouh () and Lavan Mahadeva
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Bassam Fattouh: Oxford Institute for Energy Studies, Oxford OX2 6FA, United Kingdom

Annual Review of Resource Economics, 2013, vol. 5, issue 1, 427-443

Abstract: The main purpose of this paper is to review the evolution of OPEC models and to link this evolution to some key events in the oil market. Our main conclusion is that OPEC’s pricing power varies over time. In many instances, OPEC can lose power to limit oil price movements in either direction. Such changes in pricing power are induced by market conditions and can occur in both weak and tight market conditions. Because of OPEC’s varying conduct, there is not a single model that fits OPEC behavior. Hence analysts have been forced to choose from a wide range of models to explain certain episodes. The empirical literature has not been successful in distinguishing between the various competing models, as these models offer very similar predictions.

Keywords: OPEC; OPEC models; oil prices; pricing power; collusion; rent distribution (search for similar items in EconPapers)
JEL-codes: L11 Q30 Q40 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (28)

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