Essay on Understanding OPEC An Economic Analysis

Understanding OPEC: An Economic Analysis In the last few months, much has been said of Iraq’s invasion of Kuwait in 1990. Interestingly enough, one of Iraq’s motivating factors was economics. Kuwait provided Iraq with a pretext for war as it violated the economic policies of the Organization of Oil-Exporting Countries by exporting oil above its quotas. This is but one chapter in the complicated history of OPEC. OPEC is an international assembly of nations which co-ordinates and unifies the petroleum policies of eleven countries and has enjoyed the highs and weathered the lows of oil prices in the last few decades. To solve their problems, both member countries and oil-importing countries must address the complex nature of oil price†¦show more content†¦Furthermore, a 1999 study reveals that OPEC countries commands reserves of 8111,526 million barrels of crude oil, representing 77.8% per cent of the world total of 1,042,536 millions barrels of crude oil† (FAQ 8). While this block of countries doe s not qualify as a clear-cut monopoly, it exerts tremendous influence on world supply and prices. OPEC has little concern for maximizing consumer surplus at the point where marginal cost intersects marginal revenue. Instead, it prefers to maximize profits. It constitutes one of two main players in a duopoly (when non-OPEC countries are considered a bloc). In 1973, OPEC drastically cut oil supply and saw the price of one barrel of oil skyrocketed to ninety dollars per barrel. The OPEC member countries amassed massive profits which reinvigorated stagnant economies. Slowly, however, the price of oil dropped, reaching a low of ten dollars in 1998. Short and long-term elasticity explain this movement of oil prices. The decrease in supply of oil in 1973 and the ensuing price increase illustrates the short-term inelasticity of oil demand. Elasticity measures buyers’ and sellers’ response to market condition. A highly inelastic product does not see demand drop as prices increase. Conversely, a highly elastic product sees demand drop significantly as price increases. In the short run, oil proves to be almost perfectly inelastic. This good is a necessity for all oil-based economies such as that of the United States withShow MoreRelatedEssay about JWI515 Week 5 Assignment 21521 Words   |  7 Pagesï » ¿ Assignment 2: The Five Forces that Shape Strategy Zannia S. Carty Dr. Droll JWMI 515: Managerial Economics November 9, 2014 Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. By understanding how the five competitive forces that shape strategy influences profitability in a particular industry, executives can develop a strategy for enhancing their company’sRead MoreAnalysis of Future Demand of OPEC Oil2777 Words   |  11 Pagesï » ¿Analysis future demand of OPEC oil Introduction OPEC consists of oil producing countries, and a survey conducted in the year 2008 revealed that OPEC accounts for 58% of the globes crude oil products. This has contributed to growth of its member states to becoming the worlds rapidly growing consumers of oil. Therefore, having OPEC member states as significant consumers of oil has a significant impact on the volume of their oil exports globally affecting their oil revenue; in addition, the declineRead MoreThe Product Life Cycle Theory1965 Words   |  8 Pagesproducts have gone from maturity back to a period of rapid growth thanks to some improvement. OPEC must bank on the critics being right in order to maintain its power as a cartel. TechInsider of November 5, 2015 predicts fossils fuels will be obsolete by the earliest 2050. Unfortunately, with the amount of global conflict this prediction will probably not be accurate. In terms of strategic action, OPEC needs to act swiftly and quickly as if they do not adapt they will become obsolete. StrategiesRead MorePestel Analysis Is A Marketing Framework Used To Identify748 Words   |  3 PagesPESTEL Analysis is a marketing framework used to identify and analyze the macro-environmental factors surrounding an industry or an organization. The frame work consist of five components: Political, Economic, Social, Technological, Environmental, and Legal. Political The Oil and Gas industry is heavily impacted by political factors by means such as tax policy, import export, exchange rate, and so on. Below are most recent change in global political context. †¢ The relationship between the USRead MoreDemand Of Oil Producing Countries1866 Words   |  8 Pagesto achieve their economic objectives was OPEC. The organization was modeled after the Texas Railroad Commission and formed at the Baghdad Conference in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela . The founding five counties were later joined by Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, and Nigeria . At the time of its creation most industrial countries were immensely dependent on the oil imported from the region of the world represented by the OPEC members. NonethelessRead MoreInternational Energy Policy ( Iea )1824 Words   |  8 Pagessustainable energy policies for economic growth and environment protection, reduce greenhouse gas emission that contributes to climate change. †¢ To support renewable energy to secure future energy supplies and to alleviate environmental impact, through low carbon technology and improved energy efficiency. †¢ To find solutions for the global energy challenges through engaging with non member countries. †¢ Improve transparency of international markets through analysis and collection of energy data. USARead MoreWho Are The Most Important Actors Of The Global Political Economy?1446 Words   |  6 Pagesbetween the winners and losers of global economic exchange. In fact, understanding global economy relies on a clear knowledge of the process of political competition. Political power possessed by actors regulates economic activity and in turn this creates the basis for and affects political power. Through, critical analysis of the concept of global political economy it becomes clear that there are three prominent theories that form GPE, mercantilism, economic liberalism and Marxism. At this pointRead MoreShort Term And Long Term Perspective Of Institutional Development And Economic Growth Essay829 Words   |  4 Pagesjoneses (Itim international, 2015). â€Å"There is a dramatic need for a comprehensive strategy of Eurozone stability, institutional consolidation, and economic recovery and development that goes to the roots of the trouble, and places the necessary short-term stabilization measures within the long-term perspective of institutional development and economic growth† (Dallago, 213). The United States is one of the most persistence or cultural, personal fulfilling countries in the world in developing a relationshipsRead MoreAccounting Information and Predicting Financial Performance1049 Words   |  5 Pagesinformation includes regression analysis. Regression analysis is viewed by many to be more useful that financial data or ratios alone. Regression analysis often test whether past stock prices, sales, profit, financial ratios, solvency, and other items are related to other variables including GDP, interest rates, market saturation of the industry, etc. In addition, a degree of confidence can be determined concerning the relationship of the variables in regression analysis Accounting ratios are determinedRead MoreThe Nigeria Petroleum Corporation898 Words   |  4 Pagesin an area with little or no activity. This report will examine the relationship NNPC capabilities and environmental influences using PESTLE models. PESTLE Analysis is an analytical tool for strategic organizational planning. PESTLE is a strategic scheme for understanding external influences on a business. PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental (Worthington Britton, 2009). It also concentrates on one of the biggest petroleum companies in Nigeria;

Miscommunication in BPs Messages Regarding Its Handling...

Miscommunication in BPs Messages Regarding its Handling of the Deep Horizon Oil Spill Overview Late summer of 2010 saw one of the biggest environmental disasters in American history. In a region already plagued by the affects of Hurricane Katrina, a massive oil leak exploded just off the coast of Louisiana in the Gulf of Mexico. For three months, oil gushed out of the broken well and flooded delicate swamplands with crude oil. The owner of the well, BP tried to take action and effectively communicate their solution strategies to both the public and to government, but ultimately failed tremendously based on massive miscommunication of how their efforts were actually faring in the region. Organizational Message The overall message that was trying to be communicated by BP was that they were working as hard as they could to contain the massive leak. BP wanted to ensure public confidence that the spill was being addressed in the timeliest and safest manner. However, this message was clouded with a series of major miscommunications that only seemed to make the situation worse. There was actually very little communication BP provided to the public, with miscommunications that ran rampant without an honest and tailored organizational message to handle the massive public outcry of the disaster. According to reports from the time, there have been repeated instances in which BP has tried to limit or delay the flow of information to the public on what is clearly now theShow MoreRelatedHbr When Your Core Business Is Dying74686 Words   |  299 Pagesenergy-producin ity of countries rely on g nations that won the geological lottery, ble ssing them with abunda nt hydrocarbons. And yet , eve of raw resources import n regions with plenty some form of energy. Saudi Arabia, for examp le, the world’s largest oil exporter, imports ref ined petroleum produc ts like gasoline. So if energy independence is an unrealistic goal, how does everyone get the fuel a world of rising demand they need, especially in , supply disruptions, nat ural disasters, and unstable regime s

American Election free essay sample

The two men running for the office of resident that year were the incumbent, John Adams, and the once-defeated Andrew Jackson. John Adams ran as a National Republican, later to be known as the Wigs. Adams had the support of the respectable Secretary of State, Henry Clay, but he did not have the support of his own Vice-President, John C. Calhoun. Calhoun was very powerful in the politics Of that time period. He threw his support in favor Jackson because he could tell that Adams and the Republicans wanted Henry Clay to succeed Adams in the election of 1832. William H.Crawford, presidential hopeful in 1824, also gave his support to Jackson. However, the most important man to lend his backing to Jackson was Martin Van Burden, because he could tell that Jackson was going places. Jackson was running as a Democratic Republican. Because the Democrats are widely known to be the party of the common man, Jackson could use the theory of us against them. We will write a custom essay sample on American Election or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The Democrats also gained the support of the newly formed Workingmans Party. When Adams had beaten Jackson for president four years before, the Jacksons protested that there was a corrupt bargain between Clay and Adams.This came about because once the tote went to the House of Representatives, Clay, a candidate, threw his support in favor of Adams. Once in office, Adams made Clay Secretary of State. Throughout Adams administration and the campaign, the Jacksons made the phrase corrupt bargain a rallying cry for their supporters. Adams though made enemies of his allies by refusing to remove competent civil servants from their jobs in favor of his political friends. Adams views were already known so he had to run on those. Jackson however was for anything against Adams that made Adams look bad.Everything else he was safely where in defining his position on the current issues of the time. He would just put himself in the middle if he didnt have an opinion or he didnt want to upset his supporters. So, in fact, he ran without a program. While he campaigned in the South, his friends in Washington, led by Van Burden, were winning the election for him. They concocted a tariff bill aimed at attracting electoral votes in both the Northeast and Northwest by hiking the protective rates on items favored in those areas. It was called the Tariff of Abominations, especially in the South. This raised dislike for the Adams Administration.That year was also the first year in which presidential electors were chosen by popular vote instead of congressional caucuses. This made the election even more democratic, which is what the Democrats, as they had come to be known, wanted. The Democrats, after all, were on raising the idea of democracy versus aristocracy. This campaign was not only one of the most savage elections up to that time, it is one of the nastiest in our countrys history. 80th candidates used the newspapers to do a significant part of their mudslinging. One newspaper editor that Jackson used was Amos Kendall ofKentucky. Kendall was the editor of the Argus of Western America. All of his editors though did an expert job of making his political head-hunting look like a crusade to clean Washington of corruption and privilege. One of Adams editors was Charles Hammond of Cincinnati. He was the editor of the Cincinnati Gazette. Hammond turned Jacksons marriage into a contemptible type of propaganda. But the even more effective propaganda was the Coffin Handbill, which made Jackson out to be a murderer and a ruffian because he had executed six Tennessee militiamen for mutinying during the Indian wars. Adams and the Republicans tried to make Jackson look like a murderer, a slave trader, a gambler, a brawler, a cockfight, a swear, a thief, a traitor, and a adulterer. The claims of him being an adulterer hurt him the most because he Was madly in love with his wife, Rachel. They even described her as being a strumpet and a where. The Democrats countered with accusations of Adams pimping for the Czar of Russia while he was in Washington, recklessly spending money for a pool table, cues, and balls, being a monarchist, and being an aristocrat. The charge that one Democrats the election though, was that of the corrupt bargain.The election of 1828 was not one of Americas kindest elections, but it was a pivotal one. No election up to that point had held nominations by a popular vote or had such dirty campaigning. No one can say for sure who, between Adams and Jackson, was more brutal in their attacks. Their campaigns should be looked upon as something to learn from, something not to emulate. But instead it started a long line of dirty campaign tactics and character slander. These facts are debatable, but one isnt, it was one of the most important presidential elections ever.