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Is OPEC to blame for the rising price of oil?
Made Popular May 21 2008
The US House of Representatives approved legislation to bring a lawsuit against OPEC calling it a cartel solely responsible for skyrocketing oil prices and global inflation. Gordon Brown too castigated OPEC for holding back oil supplies and keeping the price, which stands at a record $129 a barrel, artificially high. OPEC denies all allegations and refuses to increase the production. However, should OPEC alone be blamed when the world’s oil fields are simply running dry?
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Jitaditya
jitaditya06.multiply..
May 21 2008
Ahmedabad,
India
It is obvious if someone has monopoly power! It also has to be noted that the oil cartel is led by the Arab nations and their relationship is deteriorating with the US, so the global politics is definitely going to have an impact on their decision. After all it is the only trump card these nations have.
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(Global Perspectives)
’Power always brings blame’. I hope most of us are privy to the phenomenon called Peak oil. Wiki says ’it is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline’. Since petroleum production is nearing its peak, it is natural that the prices have increased to sustain a balance between demand & supply. Instead of cribbing about it, we need to identify ways to reduce our oil consumption.
(Global Perspectives)
And for people who think the OPEC is holding back its oil reserves - ’300 billion of the world’s 1,200 billion barrels (190×109 m3) of proven reserves are in fact speculated. These figures have been inflated conveniently.
(Global Perspectives)
To a certain extent yes. But OPEC alone cannot be held responsible for oil prices as increasing demand also is a huge contributor to skyrocketing oil prices. BTW the oil resources won’t last for too long. So i guess we gotta look for alternate sources of fuels pretty early.
(Global Perspectives)
@Jayaprashanth
Don’t you think OPEC is holding back oil supplies ’coz there is a demand-supply mismatch? So, wouldn’t it be unfair to blame OPEC for the rise in prices? It is a question of incumbency here and I don’t see any vested interests.
Don’t you think OPEC is holding back oil supplies ’coz there is a demand-supply mismatch? So, wouldn’t it be unfair to blame OPEC for the rise in prices? It is a question of incumbency here and I don’t see any vested interests.
(Global Perspectives)
OPEC has always been the root cause of oil crises, ever since it was formed in the seventies.
Why should the OPEC countries raise production when they are getting the same revenues by high prices? Low output and high revenues; that is the situation today. It has become the mantra of OPEC.
As long as the monopoly (near) called OPEC exists, it will continue sucking all the nations of its wealth.
Why should the OPEC countries raise production when they are getting the same revenues by high prices? Low output and high revenues; that is the situation today. It has become the mantra of OPEC.
As long as the monopoly (near) called OPEC exists, it will continue sucking all the nations of its wealth.
(Global Perspectives)
OPEC was established with the following goals (wiki, again):
– securing a steady income to the producing countries
– an efficient, economic and regular supply of petroleum to consuming nations
– a fair return on their capital to those investing in the petroleum industry
It is important to understand that OPEC wasn’t formed for charity. Countries like India are still energy-insensitive. How many alternate-fuel powered cars do you find here? If one needs more oil, paying for it is imperative. We are not fortunate enough to have oil fields, but are smart enough (I presume) to reduce our oil consumption.
– securing a steady income to the producing countries
– an efficient, economic and regular supply of petroleum to consuming nations
– a fair return on their capital to those investing in the petroleum industry
It is important to understand that OPEC wasn’t formed for charity. Countries like India are still energy-insensitive. How many alternate-fuel powered cars do you find here? If one needs more oil, paying for it is imperative. We are not fortunate enough to have oil fields, but are smart enough (I presume) to reduce our oil consumption.
(Global Perspectives)
Why talk of India (and China only)? Americans are still hooked onto gas-guzzling cars. The steep oil price is now slowly shaking them out of their oil-addiction.
Agreed, OPEC was not formed for charity, but what it is doing now is nothing short of robbery. It is classic case of why monopolies are bad.
Agreed, OPEC was not formed for charity, but what it is doing now is nothing short of robbery. It is classic case of why monopolies are bad.
(Global Perspectives)
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