oil par essay 300wo
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Producer nations that contain voluminous reserves have gained the spotlight and made themselves the most dominant players in the world petroleum trade. This trend was both represented and organized by OPEC, the Organization of Petroleum Exporting Countries. This organization would become the most vital force in the petroleum market, crucial in production and price determination. It would direct unprecedented power and prestige to heretofore-backward nations and regions and make the Middle East a crucial factor in world politics. (see graph 1&2)
Being perhaps the largest industry in the world, the production of oil is literally and symbolically `big business'. Since oil's inception in 1859, demand has grown steadily and remarkably, at geometric and times exponential rates. The 20th century saw oil surpass coal as the major world source of energy, at centuries end providing 39 percent of U.S. and 41.3 % of world energy. In the next 20 years, oil and gas are expected to dominate energy demand growth and bring up their share of the total energy …show more content…
Production depends more on OPEC quotas and prices than on real capacity. OPEC was founded in 1960 with 5 original members, Saudi Arabia, Iran, Kuwait, Iraq and Venezuela. OPEC chief purpose is the co-ordination and synchronization of petroleum policies amongst member states and safeguarding their individual and group interests. The OPEC statute of 1960 states that OPEC would `provide a stable petroleum market with steady supplies to consumers, reasonable prices and fair returns to investors'(OPEC). In order to work toward these ends, OPEC has generally maintained a limit on the oil produces by member states. This is done through the allocation of production quotas. While such a plan provides for and enables a stable, reasonably priced