Vancouver Index

OPEC’s mission is “to coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil prices in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.” Despite being a cartel, OPEC’s ability to control prices is questionable. Surging oil prices in the 1980s resulted in energy conservation and increased exploration outside OPEC.

 

Maintaining discipline among OPEC members has been a major problem (as is typical in all cartels). Massive cheating was blamed for the oil price crash of 1986, and in the 1990s Venezuela was considered one of the bigger OPEC cheats by regularly producing more than its quota. OPEC production and crude oil prices. Although it is difficult to identify any clear continuing relationship between OPEC’s production over time and the movement of crude oil prices, the organization has clearly been instrumental in periodic “shocks to the system” as characterized by one analyst.

 

The resource curse is a paradox of the oil and gas industry. Despite high resource prices the living standards in many oil-producing countries are low. This condition has led to the inability of countries rich in natural resources to use that wealth to strengthen their economies and, counterintuitively, to have lower economic growth than countries without an abundance of natural resources.

 

“to coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil prices in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.”

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