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Will OPEC survive?

INTRODUCTION

IN THE WAKE OF PLUMMETING OIL PRICES and the intensification of political conflict among OPEC's members, much of the scholarship since 1986 depicts the organization either as a "failing giant" or as a stumbling cartel that is doomed to vanish. While recognizing the declining influence of OPEC, the present study asserts that the current phase is temporary and that the organization will be a force to be reckoned with in the next decade. Factors responsible for the existence and continued resiliency of OPEC are twofold. First, a number of structural reasons well planted within the global petroleum market are conducive to its vitality. The symbiotic interdependence between OPEC and the global oil market is too far-reaching to succumb to the shifting prices. The global market needs the cartel as much as the cartel needs the global market. Second, overriding pragmatic economic considerations unite the political foes within the same organization. Despite internal divisions and conflicts, past experiences have demonstrated to the OPEC members that their power stems from collective bargaining and maintaining a united front. These two fundamental factors are the catalyst force behind OPEC's vitality. This essay attempts to analyze the underlying causes of this resiliency and offers some observations in regard to the future viability of the cartel in the overall context of a global petroleum market.

PRICE SETTING IN OPEC: A BRIEF OVERVIEW

Looking back at the evolution of OPEC since its inception in 1960, we can discern three distinct stages. The 1960s were considered a buyer's market, characterized by an overabundance of oil and thus depressed prices. The OPEC nations saw no change in the near future without some action on their part. In a market flooded with oil, the producing countries had to live with low prices. The turning point came with the shift toward a seller's market triggered by the Arab Israeli War of 1967.

Prior to the shift of the market, OPEC had not formed the subgroup of Arab states (AOPEC) and had not touted political causes for the sake of production reductions, nor did it consider an embargo. This was to change primarily as a result of the Suez Canal closure which in turn was a by-product of the Arab-Israeli War of 1967. The elimination of the shorter route to western oil markets resulted in several side effects, the most important of which was the coming to power of the "price hawks." The price hawks, represented by such countries as Libya and Algeria, pushed for higher prices notably in Tripoli I, II and Teheran.

The closure of the canal was a severe blow to the supply of oil to the western world, and the problem was compounded in 1970 by the accidental rupture of the Saudi tapline, closing it and cutting off a substantial amount of the Saudi oil supply. With some assistance from Syria, Libya took full advantage of the situation and negotiated the first major agreement (Tripoli I) with the oil companies on the dawn of the seller's market.

The period between 1971 and 1975 was characterized by the growing power of OPEC. During the Arab oil embargo of 1973, the Arab states attempted to use oil as a political weapon to punish the United States for its support of Israel. The cartel also began to introduce unilateral price escalations which resulted in accelerated inflation in non-communist countries, concomitantly eroding the buying power of the oil-producing states. Consequently, OPEC introduced further increases to counteract the erosion of its purchasing power. This in turn led to a greater rate of inflation, thus creating a vicious cycle and a chain reaction in price setting policies.

The OPEC nations finally faced the consequences of their arbitrary price escalations. Since petroleum is a politicized commodity and pricing is as much determined by the law of supply and demand as it is by the political factors that remain outside the Global Oil Market, it is not surprising that political decisions can have a direct bearing on the price. From 1976 to 1978, the oil states continued to try to cope with the erosion of their buying power. The dwindling of oil surpluses and the continued downward pressure on the price of crude oil put them in a difficult position, unleashing the "soft market," which was a prelude to the buyer's market of 1983. In the 1980s OPEC also suffered from escalating internal tensions. Iraq and Iran, two member nations, had been engaged in one of the longest and bloodiest wars of the Middle East in the Twentieth Century. This was followed by the Iraqi invasion of Kuwait in August 1990 and the Persian Gulf war of 1991. While diplomatic relations between Iran, Saudi Arabia and Kuwait have improved since 1991, both Iraqi-Kuwaiti and Iraqi-Saudi relations have deteriorated considerably.

During the period of 1975-1983, the Saudis, as the major leader of the organization, tried (often vainly) to unify the prices of all the OPEC nations which at the time were on a two- or three-tier level. But two major factors frustrated Saudi attempts. First, "the price hawks," now led by Libya and Iran, continued to remain defiant, selling their oil for a higher price. Second, while the major oil companies abhorred the Saudi lower prices, they continued to sell their own oil for $2 to $3 more per barrel, rendering Saudi's strategy self-defeating.

Frustrated by these developments and extensive cheating on production quotas among OPEC members and resolved to drain Iran's financial resources and hamper her ability to continue the war with Iraq, the Saudis began to flood the market by increasing their share of production. The result was an oil glut and the collapse of prices to as low as $10 per barrel in 1986.

The Saudis also hoped that the lower prices would reduce the non-OPEC share of the market and discourage research and development in alternative sources of energy, thus ensuring long-term Western dependence on OPEC oil.(1)

THE GENESIS OF THE 1986 PRICE CRASH

Three hypotheses are offered by analysts to explain the root of the 1986 oil price crash and decipher its possible consequences. First, some scholars have asserted that the 1986 loss of control over prices was related to OPEC's failure to use and effectively manipulate the changes in the world petroleum market in a more forward-looking strategy.(2) Others blamed the cartel's loss of power on economic and political situations outside of the organization's control.(3) Yet a third group contended that the only channel of survival available to the organization was to pursue a production reduction and price cutting policy. One such study concluded:

The long-term strategy that OPEC intermittently considered in the 1970's was not bold enough to maintain its status as a price administrator. The transformation of OPEC into a residual producer in the 1980's (OPEC went from nearly 60% of the western world oil supply to giving 32% in 1984) made this strategy archaic and irrelevant . . . in order to survive the 1980's, OPEC must continue to slash its production rates and roll back prices.(4)

If the first assertion is correct, OPEC can be seen as a doomed cartel. The latter two hypotheses maintained that to increase the margin of its profit in the short term, OPEC reacts to its environment rather than creating it. If these appraisals of the situation are right, which I would argue they are, then OPEC's weakening position in the global petroleum market since the price crash of 1986 can be looked upon as a temporary power shift due to the changes in the global economy. In other words, in so far as it was caused by fluctuations in the global economy in general and the crisis of the oil market specifically, the near demise of OPEC in 1986 was only a temporary phenomenon.

In order to prevent a repetition of the price crash of 1986 and the concomitant escalation of conflict in its ranks, OPEC must overcome several important obstacles. First, OPEC needs to control cheating by its members on their quotas which is a source of tension among its members and partially responsible for the oil glut. Some observers argue that the monopoly revenues are so large that every member recognizes the importance of solidarity in safeguarding their collective economic interest, thus deterring cheating. This theory is probably not accurate. If monopoly profits are large, so are the incremental profits; therefore, incentives for cheating are also huge. By 1986, massive cheating by OPEC members was reported on their production quotas, and Kuwaiti over-production, which drove the prices down in 1990, was one of the alleged reasons for Saddam Hussein's invasion of Kuwait. Why, then, has cheating not destroyed OPEC in the post-embargo era? One possible explanation is that multinational companies provide the prorating function for the OPEC nations, lessening the amount of coordination needed by the member states.(5) Also, since OPEC has had the policy of setting just the price of marker crude, this seems to have rendered the task of reaching consensus less problematic.(6)

Second, OPEC needs to maintain cohesion and unity among its members. Certain structural characteristics in the cartel have, despite the odds, facilitated the unity of the organization over the years. OPEC is constituted of a group of nations, not companies, joined in a loosely cooperating oligopoly. OPEC consists of heterogeneous countries, with different political systems. What united them at the outset and continues to unify them now is a certain desire to control their own natural resources and obtain a larger margin of profit on their commodity. OPEC, however, is a unique cartel producing a politicized commodity, oil. So far as cartels are concerned, a petroleum cartel is easier to maintain for several reasons: a) it is easy to curtail production, b) there are no long-term low cost viable substitutes yet available, c) it is impossible to recycle oil, and d) petroleum is geologically concentrated primarily in the Third World.(7) The geologic concentration is advantageous to the cartel in so far as it facilitates the creation of a common agenda and enhances strategic maneuvering. These structural-political factors -- the chief among them being the power of collective bargaining -- have been the overriding elements of OPEC unity.

THEORIES OF OPEC DECLINE

Since its inception in 1960, analysts have often predicted the demise of OPEC. The conventional perception of OPEC's fall begins with the 1973 oil price surge. As early as 1976, a study concluded that the Arab oil embargo of 1973 and the consequent deterioration of western nations' relations with OPEC would cripple the organization, resulting in its downfall.(8) This theory holds that since OPEC acted erratically by increasing prices, buyers began conserving, exploring new reserves and buying from non-OPEC supplies. This deflated the demand for OPEC oil, dropped prices, and decreased control. Many observers thought that the 1973-1974 OPEC price control was temporary and that OPEC would collapse under the weight of its own miscues and mistakes. Although the eruption of the Iran-Iraq War in 1980 acted as a catalyst to raise the prices temporarily, this spike was also deflated. The system of net backing, in which oil was sold to the refineries before a price was fixed, resulted in large scale dumping of stored oil and increased oil production. The oil refineries had no price risk and the incentive to over-refine was high. This short-term incentive led to a glut, lower prices, and lower net back value for OPEC petroleum. OPEC then had to sell more to recover the lost net back revenue, further lowering the value of crude.

By 1986 OPEC's output had declined from a peak of 31.5 million b/d in 1977 to less than 20 million b/d. The OPEC nations' oil income also shrank considerably. From the high of $38 a barrel in 1979-1980, prices fell to about $10 a barrel by 1986. Hence, from a record $281 billion in 1980, OPEC revenues declined 43% to about $163 billion in 1983 and $159 billion in 1984.(9)

Several factors contributed to the relative decline of OPEC in the 1980s. First, as the price of OPEC oil reached close to $40 a barrel in 1980, the formerly high cost production areas of the world became more competitive. In this sense by quadrupling prices in a decade, OPEC undercut its own viability and helped its competition, namely such non-OPEC producers as Canada, Norway, England, Mexico, China, India, Malaysia, Peru, Colombia, Egypt and Oman, to name a few. Having tasted the impact of the Arab oil embargo of 1973, Western nations encouraged non-OPEC production and began buying large volumes of the needed crude from them in order to undercut the political power of OPEC.

The second important factor was a considerable drop in the consumption of oil in the non-communist world. A combination of conservation and alternative sources such as nuclear and solar energy engendered a drop of 13% between 1979 and 1983.(10) A third significant factor was the destabilizing impact of the emergent spot and futures markets. From a low of 5% in 1979, by 1984 close to 45-50% of the oil sold on the world market was sold on the spot market.(11) The activities of the spot and the future markets put tremendous pressure on OPEC producers to bring their prices down in order to maintain a competitive edge.

According to the prognosticators of OPEC's imminent fall, the increasing tensions between OPEC's price "Doves" (Saudi Arabia, United Arab Emirates and Kuwait) and price "Hawks", (Iraq, Iran and Libya) can not be reconciled and will ultimately lead to the disintegration of the cartel. Those who point to the internal division within OPEC as a sign of its demise must be reminded that OPEC has never had much internal cohesion and never enjoyed much control over its product since its inception in 1960. The smaller or politically less active producers have usually followed the lead of larger and more assertive members. Libya and Iran, the price hawks, led the others into raising their prices in the 1970s. Saudi Arabia, which plays a leading role by virtue of its large volume of production, has set quotas affecting the price of oil which the others have followed. Due to increasing competition from non-OPEC states, the ability of the cartel to actually set prices has diminished in recent years. Since then, OPEC has resorted to a more classical cartel strategy, that of setting quotas.(12) Thus, Saudi Arabia has taken a larger role in OPEC. When a cartel is financially threatened, cohesion is usually better maintained than when revenue is great and the incentives for cheating are greater. Driven by an awareness that their strength lies in their collective bargaining power, the members have even more incentive to close ranks in times of crisis.

GROUND FOR OPTIMISM

Several economic as well as political factors indicate the emergence of a more favorable condition for revitalizing the cartel. As revenues diminished and political unrest and conflict caused a rift among OPEC members in the 1980s and early 1990s, a renewed discipline is expected in observing quotas. As early as 1987, OPEC had shown signs of recovery. After the 1986 price crash, OPEC's production rose significantly and the value of their product fell to $75 billion from $133 billion in 1985. In 1987, Shell Oil estimated that production rose an average of 17.7 million b/d and raised revenues to $97 billion.(13)

Saudi Arabia has long been the moderator in pricing oil. They have increased or cut back oil production in order to stabilize oil prices. One explanation for this action is that the Saudis are net wealth maximizers and recognize that higher prices in the short run will lead to incentives for conservation and development of alternative sources of energy in oil importing countries. This would induce shrinkage of the market. Since the Saudis have the highest reserves, they have the most to lose by such shrinkage.(14) But the Saudis do not have a good estimate of the critical price range which will cause the substitution to become a real threat. The decision to develop alternate sources and explore new oil fields depends on political and economic conditions in the industrialized countries of the West, namely the United States and her allies. Alternative sources of energy, such as nuclear power or coal, have not proven to be either cheap or free of danger and hazardous environmental effects. Such repercussions give credence to the belief that oil will continue to be the main source of energy into the year 2000.

Oil consumption is projected to continue to rise. Despite the decline in consumption following the oil shocks of 1973 and 1979-1980, certain factors signify a trend toward increased consumption. These factors include a growing world population, the current low price of oil, the expanding foundation of oil-dependent industries, and increasing transportation needs.

Many future projections also point toward increased demand for energy in the 1990s as a new wave of industrial activities will sweep through the developing and the industrialized world.

Some economists project that the oil market will continue to expand at a slow rate, 1.5% through the year 2000. Several factors account for this steady rate of growth. The transportation sector will foster up to one-half of this growth. With many developing countries now coming into Twentieth Century technology, their transportation needs are growing rapidly which subsequently increases their demand for oil.(15)

Having some of the fastest growing economies in the world and very little petroleum of their own, many Asian countries are among the leading energy importers. Fereidun Fesharaki, a leading oil analyst, contends that "by 2000, everybody will be more dependent on OPEC, but nobody as much as Asia."(16) Japan's consumption of oil has increased at a rate of 5% per year. Japan consumed an average of four million barrels a day in 1991, a large amount compared with much larger nations such as the United States that consumed seventeen million barrels a day. Oil consumption rose 20% in South Korea and 21% in Taiwan in 1990.(17) This was followed by a 21 percent annual growth in demand in South Korea and 10 percent growth in demand by Indonesia and Thailand in 1991.(18)

The evidence suggests the United States' dependency upon foreign oil will continue to increase. The percentage of foreign oil consumed in the United States increased from 37% in 1974 to 46% in 1979. Following the price hike in 1979-1980, this dependence decreased to 32% in 1985. Along with this decreased independence came an increase in the United States' national oil production. When oil prices began to drop in 1986, foreign oil consumption rose again. After the defeat of Iraq by the coalition forces in 1991, the position of the Saudis and the price doves was strengthened within OPEC, and the continued flow of cheap oil to the West was ensured for the near future.

Non-OPEC production has declined since 1986.(19) The output of both the former Soviet Union (an estimated 15% of the global petroleum reserve) and the United States (an estimated 5% of the global petroleum reserve) have dropped considerably since 1991. Production in the Commonwealth of Independent States (CIS) was running at 10.4 million b/d in 1991. In 1992 it dropped to 9.2 million b/d, and Russian producers have warned of a further 1 million b/d loss in 1993.(20) The U.S. output is declining at the rate of 300,000-400,000 b/d a year. U.S. production fell to 7.1 million b/d in the first two months of 1993 from 7.4 million b/d in 1991. By the end of 1993, U.S. output may well fall below 7 million b/d.(21)

The demand for OPEC oil, on the other hand, is on the rise. In 1985, for example, the demand for OPEC oil sank 16 million b/d, but by 1993 the call on OPEC output is back to about 24 million b/d and rising. Projections from the Paris-based International Energy Agency suggest that world oil demand will rise to 67.5 million b/d in 1993, up from 66.9 million b/d in 1992. The demand for OPEC oil will rise to 25.1 million b/d by the end of 1993 from 24.1 million b/d in 1992 despite the continued negative impact of the recession.(22) Table one demonstrates the trend toward increasing demand for OPEC oil since 1985.

The future trends indicate continued U.S. dependence on OPEC oil. One such projection estimates U.S. total import of foreign oil from Gulf states alone could increase to 43% of total imports by the year 2000.(23)

TABULAR DATA OMITTED

By 1995, oil prices are projected to reach the level of $18-20 per barrel and stay there, to be followed by a slight increase in the following years. This projection is based on several factors. The major OPEC customers are showing an unwillingness to sign long-term contracts. There is also evidence that some OPEC members are cheating on their production quota agreement, selling more oil than was agreed upon for a cheaper price on the spot market. This has maintained an ample supply of oil guaranteeing low prices for the near future. Lower prices in turn discourage non-OPEC production as well as energy conservation, exploiting the elasticity of the product and maintaining stability in an oil market based on OPEC hegemony. The ascendence of lower prices also means that in the short term, fuel substitution development also loses its appeal, as well as its subsidies and research funding. Moreover, the lower production cost in most of the Middle Eastern oil fields ($1-2 per barrel versus $15-20 a barrel for the new field in the North Sea, for example) renders OPEC oil cheaper and more appealing.(24)

The largest oil reserves in the world exist in the Middle East.(25) It is also a fact that nearly half of the energy-consuming equipment in the world uses oil; therefore, the next cycle of economic boom and increased industrial activities in the West will induce a swing in oil demand. If OPEC were to disband and fail completely, another similar entity would arise to take its place. The economic incentives of quasi-monopoly status and the power of collective bargaining in the industry are so great that the oil producing countries are much more apt to form a cartel and bear with the agonies of shared power. Over the years, their experience have convinced them that they have control over an indispensable and as yet irreplaceable commodity, a commodity that in a highly competitive global petroleum market can be best sold collectively.

Moreover, the relatively loose power structure has allowed enough room for autonomous decisions on price and output so as not to break the cartel in times of stress. Crisis is also an opportunity to experiment with new ideas and put forward a novel agenda, making progress possible. As the bitter price wars of the 1980s have given rise to the more subtle struggle for market share in the 1990s, OPEC has put behind its most contentious issue. In the face of increased demand for OPEC oil in the 1990s, it will be much easier to settle disputes over market shares when compared to the divisive issue of price in the shrinking market of the 1980s.

The initiative by many OPEC nations in the past decade to diversify their economies will strengthen their bargaining positions with the West. Every refinery or processing station built in an OPEC nation increases the control of member countries over their oil and consequently over a large portion of the world's oil reserves. Their share of oil in the market is large enough to have an impact. Today, the largest investment in new diversification has been in petrochemical related areas.(26) If, as some oil industry experts suggest, low oil prices will hold for the next few years, then those OPEC countries which have diversified their economies most successfully will be in a better bargaining position for their commodity. As they change from a single commodity economy to a more diversified one and as they come to rely less on oil as the sole source of income, they will be apt to sell their petroleum more selectively and obtain a better price for it.

On the political front, the cessation of hostilities between Iran and Iraq and Iraq and Kuwait has provided OPEC with an opportunity to reduce production. This could in turn remove some of the oversupply of crude oil which caused the plunge of prices in 1986. The end of these conflicts may also create a more cohesive, united and disciplined organization. There were signs of this development even before peace between Iran and Iraq. In 1986, Iran reduced its output by 300,000 barrels per day in order to reduce the oil glut and raise prices. Libya and Algeria followed suit, but with the lack of cooperation from Saudi Arabia, which favored flooding the market, the attempt to raise prices was doomed. There is ample evidence that even "the price hawks" do not favor the disintegration of OPEC. For example, in an official visit to Oman, United Arab Emirates and Indonesia as early as june of 1988, Mr. Aqazadeh, Iran's oil minister, declared that political conflict must be left out of OPEC so that the cartel's stability could be maintained.(27)

However, OPEC must avoid an important pitfall if lower production is to become a lasting reality. Now that the wars between Iran and Iraq and Iraq and Kuwait have ended, these countries may be compelled to increase their production to generate the necessary income for multibillion dollar reconstruction projects in their countries. Given such incentives, in the short term, the curbing of over-production may not prove to be as easy as one might have thought. Moreover, some of the countries such as Algeria, whose economy has been deeply affected by declining oil income, may pressure fellow OPEC members to reduce their production to support higher prices. Therefore, all the indications are that both political wings of OPEC are in agreement to prevent a glut and the consequential plummeting of prices. Such consensus leaves some hope for optimism. If indeed the decrease in production endures, higher prices will be on the horizon. According to one estimate, "If OPEC reduces output by 10 percent, world oil prices would rise by 20% to 25%."(28) Such a price rise will help to restore the morale and the discipline within the organization and revitalize it politically, demonstrating once again the primacy of pragmatic economic interest in OPEC policy.

Finally, with the emergence of consumer-producer dialogue which held its first conference in Iran in 1991, followed by a second conference in Paris in 1992, there is a new atmosphere of cooperation between oil-importing and oil-exporting countries which was nonexistent before. In addition, the rise of joint ventures, especially off-shore drilling, among the industrialized nations and OPEC members in recent years has created an additional incentive for cooperation and mutual accommodation. All of these developments may ultimately strengthen OPEC's stability in the near future.

CONCLUSION

From our brief discussion of OPEC's evolution in the past decade, we can discern a number of structural economic factors within the global market and political considerations responsible for the continued vitality of the cartel.

Economically, several important facts indicate that the organization will be well positioned in the global petroleum market for the next decade. First, OPEC possesses the largest oil reserves in the world. Second, the cost of production of OPEC petroleum is less than much of the non-OPEC production. Third, with the exception of Japan which invests considerably in research and development of alternative sources of energy, there are no immediate plans among other industrial nations to extensively explore alternative sources of energy in the near future. Indeed, the present low prices of petroleum and the environmental hazards associated with coal and nuclear energy in the post-Three Mile Island and Chernobol era, will detract from the immediacy of developing such alternatives. Fourth, the present availability of cheap oil and the projected modest increase in prices for the next seven years would also mean increasing dependence of Western oil-importing countries on OPEC. Such increased economic interdependence may lay the ground for more cooperative and accomodationist policies, such as the consumer-producer dialogue alluded to earlier that may in turn further strengthen the cartel.

The remarkable political resiliency of OPEC can be exemplified by its survival of the Iranian Revolution of 1979, the Iran-Iraqi War of 1980-88, the Kuwaiti-Saudi-Iraqi war of 1991 and the escalation of conflict between the price doves and the price hawks throughout the 1980s. OPEC has passed one of the toughest tests with a considerable degree of resiliency and organizational flexibility. As peace between the former antagonists becomes a lasting reality and the Persian Gulf experiences a new resurgence of business activity, the bruises and scars from the political conflicts of the past decade may well render the cartel a more tested and tougher organization, better prepared to face the challenges of the 1990s.

NOTES

1. See I. Skeet, OPEC: Twenty-Five Years of Price and Politics. (Cambridge: Cambridge University Press, 1988). See also F. Al-Chalabi, OPEC at the Crossroads. (New York: Pergamon Press, 1989).

2. M. A. Adelman, "Economics of International Oil Industry". J. Rees and P. Odell, eds. The International Oil Industry: An Interdisciplinary Perspective. (New York: St. Martin's Press, 1987), p. 47.

3. J. M. Griffin and D. J. Teece, OPEC Behavior and World Oil Prices. (London: George and Unwin, 1982), p. 65.

4. M. E. Ahrari, OPEC: The Failing Giant, (Lexington: The University of Kentucky Press, 1986), p. 188.

5. J. M. Griffin and D. J. Teece, op. cit., p. 78.

6. R. Mabro, OPEC and the World Oil Market: The Genesis of the 1986 Price Crash (Oxford: Oxford University Press, 1986), p. 35.

7. D. K. Wart, A. Ruston, J. F. Mungo, OPEC, Success and Prospects. (New York: New York University Press, 1976), P. 8.

8. D. K. Osborne, "Cartel Problems," The American Economic Review, vol. 66, December 1976, p. 836.

9. See OPEC: Facts and Figures 1984. (Vienna: OPEC, 1984), p. 34.

10. Business Week, 12 November 1984, p. 37.

11. Petroleum Economist, January 1984, p. 9.

12. R. Vielvoye, "Weak Systems of Quotas to Haunt OPEC This Year," Oil and Gas Journal, 28 December 1987, p. 15.

13. R. Vielvoye, "OPEC, Non-OPEC Balance," Oil and Gas Journal, 14 March 1988, p. 22.

14. Griffin and Teece, op. cit., p. 79.

15. D. Hawdon, ed., Oil Prices in the 1990's. (New York: St. Martin's Press, 1989), p. 26.

16. A. Tanzer, "Good News for OPEC". Forbes. vol. 145, (1990), pp. 40-41.

17. S. Butler, "Oil Boom in the 1990's". World Press Review. vol. 37, 1990, p. 59.

18. F. Fesharaki and N. Yamaguchi, "The Energy Supply and Demand Outlook in the Asia-Pacific Region." OPEC Review, vol. XVI, no. 2, Summer 1992, pp. 127-128.

19. Hawdon, op. cit., p. 29. See also Middle East Economic Digest, vol. 37, no. 13, 1 April 1993, p. 9.

20. Middle East Economic Digest (MEED), vol. 37, no. 8, 26 February 1993, p. 2.

21. Ibid.

22. Ibid., p. 3.

23. Subroto, "The Role of OPEC in 1990's". OPEC Review, vol. XVI, no. 4, Winter 1992, p. 7.

24. Ibid., p. 91.

25. S. R. Ali, Oil and Power Political Dynamics in the Middle East. (New York: St. Martin's Press, 1988). p. 30.

26. R. Vielvoye and B. Williams, "OPEC Members Use Campaigns to Diversify Their Economies," Oil and Gas Journal, 18 January 1988), p. 17.

27. Kayhan, 8 June 1988.

28. Christian Science Monitor, 21 July 1988.

Dr. Dorraj teaches in the Department of Political Science at Texas Christian University.
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Date:Sep 22, 1993
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