The History and Impact of OPEC Collaborations on the Oil Market

Why OPEC Collaborates with Other Companies

OPEC is a permanent intergovernmental organization of 13 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry. OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965 (taken from OPEC website; https://www.opec.org/opec_web/en/about_us/24.htm ; accessed on 25.09.2020). 

OEPC has passed through various challenges since 1960s. It was formed at first by five oil-producing developing countries at a time of transition in the international and political landscape. In 1970, its member took control of their domestic petroleum industries and acquired a major say in the pricing of crude oil on world markets. In 1980s, OPEC’s share of the smaller oil market fell heavily and its total petroleum revenue dropped below a third of earlier peaks, causing severe economic hardship for many Member Countries. In the 1990s, a solid recovery followed in a more integrated oil market, which was adjusting to the post-Soviet world, greater regionalism, globalisation, the communications revolution and other high-tech trends. During the 2000s, an innovative OPEC oil price band mechanism helped strengthen and stabilise crude prices in the early years of the decade. From 2000s till now, the global economy represented the main risk to the oil market early in the decade, as global macroeconomic uncertainties and heightened risks surrounding the international financial system weighed on economies. Escalating social unrest in many parts of the world affected both supply and demand throughout the first half of the decade, although the market remained relatively balanced (taken from: https://www.opec.org/opec_web/en/about_us/24.htm ; accessed on 25.09.2020). 

In addition to the collaboration between OPEC countries, OPEC had several collaborations with non-OPEC countries, such as China; producers and consumers, etc. 

What needs to be done?

So what are you supposed to do in this TMA? 

You are to choose ONE of the collaborations identified above to study and to answer the questions below in approximately 1500 words. Your answer has to be in essay format with an introduction, and a conclusion for each question. 

N.B.

Before choosing a collaboration to study and analyse, make sure to do your own research and ensure that the information needed for this TMA is available. This is very important since this TMA does not only rely on course material but on external resources that you will be choosing. 

Why did OPEC decide to team up and collaborate with other companies? Analyse the partnership that you have chosen as your case study. 

Hint: in your essay, you need to consider the following:

• The six bases for collaborative advantage.
• The collaboration chosen and identify the general aims of the partnership and the main bases considered.
• Discuss, based on the case chosen, whether the end result is collaborative advantage or collaborative inertia.
• Clearly identify the collaboration you have chosen and the resources you are referring to. 

Guidance

• Pay attention: do not to copy information as is whether from the course material or the case you have chosen. You are to provide a discussion and demonstrate understanding of various concepts and not just list and describe.
• You Must Refer To External Resources as they are the main source for the TMA in addition to course material. -Remember to cite your sources in the text and to prepare a table of references at the end.
• Referring to course material alone is not enough. Referring to external resources alone is not enough. You need use the course material as the base to explore and explain the information in the chosen external resources.  

For many years, OPEC had a power over oil pricing and setting restrictions on the oil market. Critically discuss to which extent OPEC power over the oil market diminished over the years. 

To answer to question 2, you need to refer to the following: 

1-https://www.oxfordenergy.org/publications/opec-pricing-power-the-need-for-a-new-perspective/
2-https://www.bloomberg.com/opinion/articles/2020-09-15/is-opec-s-power-over-the-oil-market-broken 
3-https://www.researchgate.net/publication/257126357_OPEC_Market_failure_or_power_failure 

Referring to these three resources is Mandatory. In addition to these resources, you may refer to additional articles/reports/links/etc. to support your discussion. 

Hint: in your essay, you need to consider the following:

• Power over, power for and power to.

• Do not copy information as is whether from the course material or the articles you are to refer too.
• You are to provide a discussion and demonstrate understanding of various concepts and not just list and describe.
• You Have To Refer To The Three Articles Mentioned In The Question As They Are The Main Sources For The Tma In Addition To Course Material. You May Refer To Additional Articles To Support Discussion.
• Remember to cite your sources in the text and to prepare a table of references at the end.
• Referring to course material alone is not enough. Referring to external resources alone is not enough. You need to use the course material as the base to explore and explain the information in the course material and mentioned external resources.