OPEC Oil Production Strategy and Its Implication on Global Oil Market Stability

摘要

This paper applies statistical analysis to data describing therntrends in OPEC oil production ceiling allocations from 1982-rn2001 The empirical analysis presupposes that a corporaterndecision framework guides OPEC production ceilingrnallocations subject to individual member characteristics andrnobjectives. On average, and with a highly significantrnconfidence interval, the empirical results indicate that thernresponsiveness of production quota to capacity , crude oilrnprices, reserves and other determinants are relatively small butrninelastic. The empirical results also show therncontemporaneous nature of each of OPEC’s allocation criteria.rnThis suggests that if OPEC really wants to accomplish a stablernoil market, then each member nation must accept some jointrnresponsibility and bear some equitable production reductionrnbased on these criteria as and when necessary. Such anrnagreeable mechanism governing production ceiling allocationsrnon the basis of concrete factors/criteria can significantlyrnreduce the apparent lack of production discipline amongrnmembers that has hitherto plagued OPEC1.