ABSTRACT. This paper briefly examines whether OPEC is able to keep the crude oil price above long-term marginal extraction costs. A comprehensive analysis of the most important determinants of both the oil price and extraction costs reveals a coherent picture of how those forces interact. We find that in contrast to previous oil price surges, global demand and supply factors as well as broader geopolitical uncertainties have played a much greater role in the recent past. The fading market power of OPEC is related to its instability as a group to act homogeneously. Instead, each country is likely comply with OPEC agreements only as long as they are aligned with own political and economic interests. pp. 61–69
JEL codes: L72; O13; P28; Q27; Q32

Keywords: OPEC; oil price determinants; extraction costs; Hotelling rule; resource pragmatism and nationalism; global demand

How to cite: Zietlow, Kim J. (2015), “What Is Left Today? Analyzing OPEC’s Influence on the Crude Oil Price,” Journal of Self-Governance and Management Economics 3(4): 61–69.

Received 21 February 2015 • Received in revised form 8 October 2015
Accepted 8 October 2015 • Available online 15 October 2015

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Humboldt University of Berlin

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