OPEC: What Difference Has it Made?

Posted: 11 Oct 2013

See all articles by Bassam Fattouh

Bassam Fattouh

University of Oxford - Oxford Institute for Energy Studies

Lavan Mahadeva

University of London - School of Oriental and African Studies (SOAS)

Date Written: June 2013

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.

Suggested Citation

Fattouh, Bassam and Mahadeva, Lavan, OPEC: What Difference Has it Made? (June 2013). Annual Review of Resource Economics, Vol. 5, Issue 1, pp. 427-443, 2013. Available at SSRN: https://ssrn.com/abstract=2339086 or http://dx.doi.org/10.1146/annurev-resource-091912-151901

Bassam Fattouh (Contact Author)

University of Oxford - Oxford Institute for Energy Studies ( email )

57 Woodstock Road
Oxford, OX2 6FA
United Kingdom

Lavan Mahadeva

University of London - School of Oriental and African Studies (SOAS) ( email )

Thornhaugh Street
Russell Square: College Buildings 541
London, WC1H 0XG
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Abstract Views
484
PlumX Metrics