Word: cartelizing
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...figure may not be wholly trustworthy: key parts rose more rapidly than the index as a whole. Farm products and processed foods and feeds went up a disturbing 2.3% in August alone. The OPEC cartel has announced a price increase of 10% on crude oil, but there is speculation that the world oil glut will hold actual increases to less than that...
Judging from past sessions, nobody expected the meeting in Vienna last week of the ministers of the 13-nation Organization of Petroleum Exporting Countries to be a quiet affair. But few foresaw what by week's end had become a dramatic and bitter tug of war between the cartel's two major producing nations, Saudi Arabia and Iran. After four days of fierce wrangling, the members compromised Saturday on a hike in world oil prices of only 10%, or about $1.05 per bbl., well below the 35% or so that had been bruited about a few months...
...increase, which took effect Oct. 1, follows a nine-month price freeze imposed by the cartel last December. World prices had been pegged to the $10.46 that Saudi Arabia charged for a 42-gal. barrel loaded at the Persian Gulf port of Ras Tanura. In the U.S., which imports about a third of its oil, the increase when averaged in with prices of domestic oil will add less than 10 per gal. to the price of gasoline, heating oil and other products. Most other nations import a greater percentage of their crude and will feel the increase more, especially those...
Still, the OPEC hard-liners contended that the cartel should post a big price boost because inflation in industrial nations and the sharp drop in demand caused by world recession had slashed the member nations' buying power (see box). In the end, though, that argument foundered on four basic realities. Perhaps the most important one is that Saudi Arabia, which produces about a fourth of all OPEC oil, has the power to break the cartel if it chooses; no price increase that it finds intolerable has a chance of sticking. In addition, a huge price boost would have retarded...
...dizzying series of oil-price hikes begun by OPEC in late 1973 led to widespread speculation that the cartel's members would eventually soak up a disruptively large share of the monetary reserves of the non-Communist world. But these forebodings could not take into account the world recession that has slashed oil demand. Today OPEC'S output is running at about 28 million bbl. per day, v. 33 million bbl. just before the 1973 embargo, and revenues are falling below expectations...