Question

What impact would OPEC’s reduction in the supply of crude oil have on the price of oil in the global market and the subsequent quantity of crude oil demand in the short run? Please explain the shifts in demand and supply curves with help of a relevant graph.

Answer 1

Answer:

OPEC+ subsequently exerts considerable influence over the global market price of oil and, understandably, tends to keep it relatively high in order to maximize profitability. If OPEC+ countries are unsatisfied with the price of oil, it is in their interests to cut the supply of oil so prices rise.