Member countries of the Organization of Petroleum Exporting Countries produce about 40 percent of the world’s crude oil, with exports representing about 60 percent of petroleum traded internationally. But when OPEC failed to reach agreement on controlling oil production levels at its April meeting, prices surprisingly crept up higher. For now, the global market has concluded that no producer, including OPEC, can exert control over prices, writes Chris Miller, associate director of Yale University’s Grand Strategy Program. “The oil-price slump has put financial pressure on oil producers across the world, from Venezuela to Malaysia to Kazakhstan,” he explains. “Over the past year, many officials and industry executives began advocating for cooperation between Russia and OPEC in an attempt to bolster prices.” Saudi Arabia refused to go along without rival Iran, and the deal may not have accomplished much anyway. The United States, which prohibits its companies from joining cartels, has become a swing producer, and alternative energies are also slowing growth in the demand for oil. – YaleGlobal
http://yaleglobal.yale.edu/content/opec%E2%80%99s-control-over-global-prices-slips-away?utm_source=YaleGlobal+Newsletter&utm_campaign=27edc30a00-Newsletter9_14_2010&utm_medium=email&utm_term=0_2c91bd5e92-27edc30a00-207760089
