A cartel is a formal organization of producers to synchronize supply and demand of a particular product or commodity. A public cartel operates at at a governmental level and a private one at the level of companies. The most famous oil cartel is OPEC. This is an acronym for the Organization of Petroleum Exporting Countries.
Until quite recently all the world's fossil fuels seemed to be in the hands of twelve countries that had little else but this precious resource that lay often beneath desert sands. That seemed to give them immense power through OPEC but soon they realized that the people who bought their product needed to be healthy in order to buy.
Some of the twelve OPEC countries are ruled by despots or dictators and they soon realized that their easily amassed wealth was inextricably linked with the well being of developed countries which bought their product. As this realization dawned they began to invest in politically stable countries driven by fear that their worldly assets would become worthless in a world such as their own. In this way the mission changed from price protection to protecting a balance between supply and demand.
The power of OPEC was further diminished by the discovery of energy supplies in parts of the world outside the traditional production areas. New fields were discovered in the North Sea, in the Gulf of Mexico, in Russia and in Alaska. Despite this, OPEC countries are still estimated to control about eighty percent of world supplies
It is obviously in the interests of fossil fuel producers to have people own petroleum driven cars. This may be part of the reason why the development of electric cars has been possible but excruciatingly slow for many years. However, environmental realities are now forcing governments to take action before the world clogs itself up with carbon to a disastrous extent. Suddenly, electric cars are not only possible but also economical and increasingly fashionable.
An oil cartel must balance the greed for high prices against the fear of losing demand for its product to alternatives such as bio fuels and battery driven cars. Under current circumstances the trend must be towards keeping prices low enough to sustain demand in the face of available alternatives.
Until quite recently all the world's fossil fuels seemed to be in the hands of twelve countries that had little else but this precious resource that lay often beneath desert sands. That seemed to give them immense power through OPEC but soon they realized that the people who bought their product needed to be healthy in order to buy.
Some of the twelve OPEC countries are ruled by despots or dictators and they soon realized that their easily amassed wealth was inextricably linked with the well being of developed countries which bought their product. As this realization dawned they began to invest in politically stable countries driven by fear that their worldly assets would become worthless in a world such as their own. In this way the mission changed from price protection to protecting a balance between supply and demand.
The power of OPEC was further diminished by the discovery of energy supplies in parts of the world outside the traditional production areas. New fields were discovered in the North Sea, in the Gulf of Mexico, in Russia and in Alaska. Despite this, OPEC countries are still estimated to control about eighty percent of world supplies
It is obviously in the interests of fossil fuel producers to have people own petroleum driven cars. This may be part of the reason why the development of electric cars has been possible but excruciatingly slow for many years. However, environmental realities are now forcing governments to take action before the world clogs itself up with carbon to a disastrous extent. Suddenly, electric cars are not only possible but also economical and increasingly fashionable.
An oil cartel must balance the greed for high prices against the fear of losing demand for its product to alternatives such as bio fuels and battery driven cars. Under current circumstances the trend must be towards keeping prices low enough to sustain demand in the face of available alternatives.
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