Word: cartelized
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Confusion in Caracas gives opportunities to the cartel's customers...
While Venezuelan air force helicopters whirred in the sky above and 5,000 soldiers patrolled on the ground below, armed motorcades wound through the clogged streets of Caracas. It was a typical Panavision entrance for the 13 oil ministers of the Organization of Petroleum Exporting Countries. The price-fixing cartel that had tiptoed onto the stage of international power politics a decade earlier was gathering amidst pomp, pageantry and supertight security to do what it had learned to do best: demand more money...
...members did just that. But after the most fractious meeting in OPEC's history-it was a "bazaar" in the scoffing description of Saudi Arabia's Oil Minister, Ahmed Zaki Yamani-the cartel failed to agree on any uniform price. Instead, each country will fix the cost of its crude. The cartel also failed to set limits on production, as some of its hawks sorely want to do. In fact, the divisions were sharp enough to raise questions about the future of OPEC. While its members' separate price rises will cause immediate pain to the rest...
Aramco got a bonanza from the gap between the $18-per-bbl. price that Saudi Arabia had been charging, vs. the official cartel ceiling of $23.50. In unregulated markets outside the U.S., Aramco's proud parents have been able to sell their gasoline, heating oil and other products for high prices even though these fuels were made from the lowest-cost cartel crude. Largely as a result, third-quarter profits of Exxon, Mobil, Texaco and Socal jumped by anywhere from 73% to 211%. The revenue surge enraged the Saudis; Oil Minister Ahmed Zaki Yamani argues that Aramco...
...people who know the real size of Saudi Arabia's production capacity. Last spring Exxon and Socal divulged to the Justice Department, in its ongoing anti-trust investigation of the oil industry, that Aramco had little spare capacity. That statement helped to undercut Saudi influence over cartel price policy. On the eve of the Caracas gathering last week, Saudi officials proclaimed that the country could boost output almost immediately, perhaps to a hefty 11 million bbl. Meanwhile, the Saudi government is punishing Socal and Exxon for their indiscretion; Aramco is under orders to cut back deliveries to those...