OPEC and World Crude Oil Markets from 1973 to 1994: Cartel, Oligopoly, or Competitive?

Alhajji, A.F.; Huettner, David
July 2000
Energy Journal;2000, Vol. 21 Issue 3, p31
Academic Journal
This study investigates the existence of a dominant producer in the world crude oil market for the period 1973 to 1994. Contrary to the literature, the results show that neither OPEC nor the OPEC core can be characterized as a dominant producer. Using statistical tests, we also investigate whether OPEC, the OPEC core, or Saudi Arabia fit the competitive model or the Cournot model. The statistical results reject all models except the dominant firm model for Saudi Arabia. New user cost estimates are introduced and included in the models. An alternative explanation of high OPEC profits in the 1973-82 period is also developed as part of a statistical test of the effect of the US oil price regulation on world oil demand and supply. An estimate of the wealth transfer from price regulation is also calculated.


Related Articles

  • Oil: OPEC A Greater Risk Than Iraq?  // Emerging Markets Monitor;5/3/2004, Vol. 10 Issue 4, p16 

    Reports on the status of the global oil industry as of May 2004. Effect of the U.S. stand-off with Iraq on the global oil market; Impact of the price band pressure by the Organization of Petroleum Exporting Countries on the oil market; Commitment of Saudi Arabia to the existing price band.

  • Cooking Numbers with Gas. Wilson, Kevin A. // AutoWeek;11/24/2003, Vol. 53 Issue 47, p8 

    This article presents information related to the oil market and the repercussions of decisions taken by the Organization of Petroleum Exporting Countries (OPEC) in the U.S. Thirty years ago, OPEC had the U.S. in a bind. It raised oil prices from $4.90 to $8.25 a barrel and limited supply...

  • Russia. Hill, Fiona // Brookings Review;Spring2002, Vol. 20 Issue 2, p28 

    Focuses on the possibility that Russia could take on the Organization of Petroleum-Exporting Countries and help shift global oil supply away from the Middle East and Persian Gulf. Status of Russia's oil industry during the 1990s; Information on the Caspian Basin and the Geopolitics of Russian...

  • The Target Capacity-Utilization Model of OPEC and the Dynamics of the World Oil Market. Powell, Stephen G. // Energy Journal;Jan1990, Vol. 11 Issue 1, p27 

    Discusses the major paradigms in oil market modeling to place the Target Capacity-Utilization (TCU) model in context. Models of the world oil market; Components of the TCU model; Empirical evidence for the TCU model; Simple simulation model of Organization of Petroleum-Exporting Countries...

  • Pay Dirt-Again. Gawlicki, Scott // Investment Dealers' Digest;07/26/99, Vol. 65 Issue 30, p18 

    Reports on the equity deals as the major factor for the recovery in mid-1999 of the oil and gas industries. Emergence of equity offerings following the cutback in production by the Organization of Petroleum Exporting Countries in March 1999; Stability in oil prices to lead to healthier cash...

  • The new oil order: Built on sand? Aarts, Paul // Arab Studies Quarterly;Spring94, Vol. 16 Issue 2, p1 

    Discusses the implications of the creation of a `new oil order' focusing on the internalization of Arab oil wells. Background on the Second Gulf War; American foreign policy on oil; Developments in the oil industry; Role of the Organization of Petroleum Exporting Countries (OPEC).

  • Gas search countering OPEC gyrations  // Offshore;May1988, Vol. 48 Issue 5, p35 

    No abstract available.

  • Capital flight. Le Blanc, Leonard // Offshore;Apr96, Vol. 56 Issue 4, p7 

    Opinion. Comments on the large outflows of private capital experienced by the Organization of Petroleum Exporting Countries (OPEC) in the Gulf area. Factors affecting the industry; Ways to stem the outflows.

  • BURNING the MIDEAST Oil. Vilbig, Peter // New York Times Upfront;2/7/2003, Vol. 135 Issue 9, p8 

    Discusses the importance of oil supply to the U.S. Impact of a strike in Venezuela's state-owned oil company on the U.S.; Information on the backup supply of the U.S.; Plans of the country to avoid putting its economy at the mercy of the Organization of Petroleum Exporting Countries.


Read the Article

Other Topics