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An Unstable World Oil Market

Abstract:
There is a permanent surplus because huge low-cost reserves are available for development. The cartel keeps them undeveloped to maintain the price. Their power is great, but they are a "clumsy cartel" and sometimes overreact to produce a shortage. Hence the future is cloudy and threatening, like the recent past.

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Security and Geopolitics – Energy Security

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
Q48 - Energy: Government Policy

Keywords: World oil market, Low-cost oil reserves, cartel, volatility

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No1-4


Published in Volume 6, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.