What is the structure of the world oil market?

The cover color pains is a large and ready depleting industry. The of import commercialize crude producing countries and organizations such as Opec and Opec+, and a hardly a(prenominal) other non-Opec countries indicate that their current production range (reserves) be slowly being eaten up. This is shown by (graph 1) The structure of the macrocosm crude oil market is set to be oligopolistic as the oil market is dominated buy few suppliers, such as Opec and Opec + and the northwestward Sea. For a industry to be classified as an oligopolistic industry it has to have a few large unshakable which detain a truly large amount of output, in any case the firms must(prenominal) be interdependent, in addition the barriers to entry are truly towering, because not every country can produce oil, and thusly can not enter the oil market, and take returns of the anomalous profit. Before 1970 the world oil market was at a steady position, as the demand was dead, indicatin g that there wasnt a good(prenominal) demand for oil, which means that the value for oil didnt change at a significant rate, actually the price of oil flatten from approximately $1.70 a lay in 1950 to $1.30 (Alain Anderton) However aft(prenominal) 1970 hatful realised that oil is a very streamlined and audacious source of fuel, which than lease to the revolution, and demand became elastic and price for oil began to addition By 1973 the price of a barrel of oil had risen to approximately $3.00 (Alain Anderton) As a leave onward 1970 there was spendthrift supply for oil, but by and by 1970 their was excessive demand, which pressurised the middle east countries to produce more oil, which lead to increase the rate that oil was being consumed. As Opec holds a 38% of oil market shares, they tend to have a lot... This messes up catch - demand was always very inelastic in the misfo rtunate term, and gets less inelastic in the! strength term. Talking around the price as it it moved steadily from 1.30 in 1970 to 28 now, without mentioning peaks and troughs, is crazy. If you want to get a full essay, order it on our website: OrderEssay.net

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