How Does OPEC Control the Price of Oil?

Sunday, May 22, 2011

In the article, Achieving Energy Victory, Robert Zubrin writes:


an OPEC meeting
To understand how we can break away from oil, we must first understand the workings of the Organization of the Petroleum Exporting Countries (OPEC), the cartel arrangement that has fabulously multiplied the Saudis’ petroleum revenue stream and the power that goes along with it. 
Founded in 1960, OPEC is an open conspiracy in which representatives of the rulers of a dozen kleptocracies (Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela) get together at periodic meetings and decide what the world price for oil should be, and then assign production quotas to each so as to force the price to that level. This is very different from the way business is conducted in a free market, and it produces very different results.

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