Word: cartelism
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Disguised Blessing. In its analysis of the energy crisis, Mankind supports the views of the Shah of Iran and other members of the oil cartel by arguing that higher prices are really "a blessing in disguise." Reason: if the price of oil had remained at pre-embargo levels, demand for the fuel would have been so heavy that known reserves would have probably run dry around the end of the century. That would leave the Middle Eastern countries with resources too meager to finance continued economic development, and the oil-importing nations without sufficient alternative energy sources...
...cartel's solidarity is remarkable in view of its members' differences. The Arab countries see oil as a political weapon to use against Israel; the non-Arab states see oil strictly as a commercial commodity. Within the Arab bloc, the radical states (Algeria, Libya and Iraq) often have political battles with the feudal monarchies (Abu Dhabi, Kuwait, Qatar and Saudi Arabia). Iran and Iraq are on the verge of hostilities because of border disputes...
...power also increased because the world's growing oil demand changed a buyers' market into a sellers' market. During last year's Middle East crisis, OPEC achieved its greatest success when Arab members imposed an embargo, demonstrating how dependent the world had become on the cartel...
Some observers believe that OPEC has succeeded because the oil companies and the governments of the oil-consuming nations have lacked the courage to oppose the cartel; any concession to OPEC merely encouraged further demands. The Shah of Iran seems to agree...
...producing countries suffer even the slightest defeat," he said in 1971, "it would be the death knell for OPEC." If a united front of oil consumers can be created, the cartel could suffer that initial defeat. This could hasten the day when OPEC shares the fate of history's other cartels-disunity as each of its members seeks to secure its own favored deal with customers...