An Overview of OPEC through Mouawad's New York Times – Article Example

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The paper "An Overview of OPEC through Mouawad's New York Times " is a great example of an article on politics.   Jab Mouawad's recent article in the New York Times refers to a level of concern among some OPEC nations about decreasing oil prices in current market conditions. OPEC is a highly influential organization in world affairs today. Energy is the principal driver of modern economies and oil is currently the major currency and source of energy. "Oil continues to be the world's most important fuel, contributing 39 percent of the global energy supply. " (Kohl, 2005)An understanding of OPEC, its origins, its history, and its current role in world affairs is instrumental in coming to an understanding of the modern world.

In terms of economics, OPEC is, for all intents and purposes, a cartel organization. A review of the many functions of OPEC and its economic implications will offer insight to modern affairs. This paper will briefly review OPEC in reference to Mouawad's New York Times article. Origins of OPECOPEC today consists of 11 nations from the Middle East, Africa, South America, and South-east Asia.

The Middle Eastern contingents include Iran, Iraq, Saudi Arabia, United Arab Emirates, Kuwait, and Qatar. From Africa, there is Algeria, Libya, and Nigeria. South America and South-east Asia contain the lone contingents of Venezuela and Indonesia respectively. OPEC originally formed in the early 1960s in response to the imposition of US quotas on oil production in the area. Initiated first by Venezuela and then joined by a number of the Middle Eastern countries an attempt was made to try to control the production in order to garner higher prices.

This is a classic example of a cartel, that is an organization that limits production and thus supply ensuring a higher demand and in turn higher prices. This flouts the idea of competition in the marketplace but it has been possible because the OPEC nations collectively have a majority of the world's oil reserves the unique status of political sovereignty. Political factors have played a huge role in the running of OPEC's organization. There are many factors to consider here. The contentious history of Israel's existence in the region has led to many problems.

US support for Israel in the 1973 Yom Kippur war led to a reaction by the Middle Eastern countries represented by OPEC which responded by reducing the production of oil, leading to a crisis across the world.    

References

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Georgiou, G. C. (1987). Oil Market Instability and a New Opec. World Policy Journal, 4(2), 295-312. Retrieved September 12, 2006, from Questia database: http://www.questia.com/PM.qst?a=o&d=95721187

Ghosh, A. (1983). OPEC, the Petroleum Industry, and United States Energy Policy. Westport, CT: Quorum Books. Retrieved September 12, 2006, from Questia database: http://www.questia.com/PM.qst?a=o&d=23343062

Kohl, W. L. (2005). The Perfect Storm: OPEC and the World Oil Market. Harvard International Review, 26(4), 68+. Retrieved September 12, 2006, from Questia database: http://www.questia.com/PM.qst?a=o&d=5008875192

Moore, J. B. (2003). The Natural Law Basis of Legal Obligation: International Antitrust and OPEC in Context. Vanderbilt Journal of Transnational Law, 36(1), 243+. Retrieved September 12, 2006, from Questia database: http://www.questia.com/PM.qst?a=o&d=5002006204

Rueda, A. (2001). Price-Fixing at the Pump. Is the OPEC Oil Conspiracy beyond the Reach of the Sherman Act?. Houston Journal of International Law, 24(1), 1+. Retrieved September 12, 2006, from Questia database: http://www.questia.com/PM.qst?a=o&d=5000945081

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