Word: cartelism
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Snapping and snarling at the industry benefit nobody?except the OPEC producers, who exploit the divisions within importing nations. Only when those countries conserve more, produce more and reduce their umbilical dependence on the cartel, can they beat the Oil Game...
...fact, Big Oil is hardly the voracious, devouring money muncher that the White House contends. That distinction belongs to OPEC, which provides the world with half its daily petro-ration and, by controlling the supply, fixes the price. Having hiked the base price 14.5% since January, the cartel has lately tacked on expensive premiums and surcharges and now threatens price increases in June. The rises are a major reason why inflation hit 13% in this year's first quarter...
Since 1973, as the price of the cartel's oil has jumped from $2.41 per bbl. to $14.55, an incredible $550 billion has cascaded into OPEC coffers. The cartel's leaders, many of whom head backward and unstable regimes, have been propelled to the forefront of world economic, financial and strategic affairs. Variously smooth and snappish, OPEC'S chiefs contend that they are merely embellishing the rules of the game as taught by the oil majors. From the moment that John D. Rockefeller organized the infant U.S. petroleum industry into a producers' cartel to maintain stable and profitable prices, companies...
...producing states have discovered that the secret to the Oil Game is collusion, not competition. So far, the cartel's principal difficulty has been getting all members to agree to price-propping production quotas. But Libya has been cutting back on its normal deliveries by 17% since April 1, while Iran, whose production is now at 4 million bbl. a day, is actually pumping only two-thirds of its prerevolutionary volume. Others may soon follow with cutbacks of their...
...Some cartel members, of course, really do need the money. States like Venezuela and Indonesia have launched crash development programs to provide for their large, poverty-blighted populations. From an initial surplus of $60 billion in 1974, which the cartel simply could not spend fast enough, OPEC'S ledgers have returned to close to balance for nearly all members. But there are major exceptions. Saudi Arabia, Kuwait and the smaller Persian Gulf sheikdoms still have large surpluses...