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Word Count: 1,546
A cartel is an organisation of producers grouped together for their own benefit The most well known cartel in existence today is OPEC Organisation of Petroleum Exporting Countries Its members are some but not all of the most important oil producing countries including Saudi Arabia and Mexico Most cartels try to raise prices at the expense of consumers The aim of this essay is to determine whether OPEC has been a successful cartel this will mean I have to examine the strengths and weaknesses of OPEC which have been present throughout their existence of supplying oil This should allow me to make an appropriate judgement on whether OPEC has been a successful Cartel The history of oil prices can give me important information on how well OPEC has managed to control prices YearCrude oil prices per barrel 19703 197513 198035 198527 199017 200014 The brief history of oil prices show that oil was cheap in the 1950s and 60s This was due to supply growing faster than demand The early 1970s saw a reversal of this trend as demand increased faster than supply This was mainly due to the world economy booming Source adapted from BP statistical review In November 1973 politics in the Middle East was to have a great effect on oil prices With an existing tight market the result was am explosion in the price of oil The war was soon over but its economic downturn effect was not lost on OPEC OPEC whose members at the time supplied over 60 of world demand for oil organised a system of quotas amongst themselves fixing limits on how much each member could produce By slightly cutting back on pre-1973 production levels they were able to increase the average price of oil to around 13 as shown in the table above Price
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