NationStates Jolt Archive

Normally, I wouldn't propose this, as it is not the most market-friendly option out there. Yet there is OPEC. Say what you want about OPEC price fixing, but the fact of the matter is that OPEC can produce far more than what they are pumping out. And the recent upsurge in production elsewhere is a false sense of security. With the exception of Russia, no substantial reserves of oil have been found, despite oil production everywhere. And while some, such as the tar sands of Canada, may be sustainable production, that does not cover the fact that the best, lightest, and probably the cheapest oil lies in OPEC. Yet the OPEC nations have defied economic logic, and use it purely for their political purposes. They choose not to create that much wealth when they can just drill it out of the ground.
Thus, fire needs to be fought with fire. Any association of buyers would negotiate with OPEC a price range, or a production target, giving the buyers leeway on a political field. While they shouldn't need this, they do now that OPEC holds the world hostage.
The idea is not new. It was first proposed during the oil crisis of the 70s, but abandonned when the US remained the only major importer in the world. It was completely forgotten with the collapse of gas prices in the 80s.
Now, we have a new oppritunity. The economies of Asia are roaring to life, importing loads of oil, especially from OPEC. China is growing rapidly, which went from Asia's largest exporter twenty years ago to the second largest importer today. And only now can anyone in China afford a car, too. It will take reworking of the Sino-US energy relations, which are in needless tension. Yet if these two can come together, and encourage the other growing importers to come along, our leverage in OPEC in general, and the Middle East in particular, will be greater.

Considering OPEC nations account for only 40% of oil reserves (I may be wrong...?), it'd be nice to have our own oil production indexed to OUR price needs, and not theirs...

Considering OPEC nations account for only 40% of oil reserves (I may be wrong...?), it'd be nice to have our own oil production indexed to OUR price needs, and not theirs...
OPEC accounts for two-thirds, despite having only a third of the world market share right now. Yet some of the older fields in Norway, Mexico, and Alaska are shutting down, and all of which are very big. The Gulf of Mexico looks promising, but even at its peak, it's expected to provide just a sliver of world needs.

Isn't it reasonable to assume that oil prices will continue to rise and that the OPEC countries' reluctance to increase their oil export at the present time will pay off in the long run? I'm just curious.

exactly how would this cartel work? demand that they sell us all we want at a lesser price or we'll not buy ANY? we'll go to their competitors and buy from THEM?

if bush didnt have his tongue so far <deleted for decency> he would have had the saudis increase their production and lower the price just like every other president of the US has done.

if bush didnt have his tongue so far <deleted for decency> he would have had the saudis increase their production and lower the price just like every other president of the US has done.

The Saudis are manipulating this market. They are encouraging terrorists to strike targets just enough to bid up prices but not affect production. At the same time, they are intentionally weakening the dollar by replacing it with Euros, which increases oil prices, and then profit when the currency returns to normal. We cannot trust them, and we can't keep begging them to increase production.

The Saudis are manipulating this market. They are encouraging terrorists to strike targets just enough to bid up prices but not affect production. At the same time, they are intentionally weakening the dollar by replacing it with Euros, which increases oil prices, and then profit when the currency returns to normal. We cannot trust them, and we can't keep begging them to increase production.

Well the oil speculators are involved as well......

exactly how would this cartel work? demand that they sell us all we want at a lesser price or we'll not buy ANY? we'll go to their competitors and buy from THEM?

if bush didnt have his tongue so far <deleted for decency> he would have had the saudis increase their production and lower the price just like every other president of the US has done.
Well, alot of those OPEC countries are arid, barren wastelands. Just tie the price of food to the price of oil. You charge too much for oil, wheat becomes $15/pound.

The Saudis are manipulating this market. They are encouraging terrorists to strike targets just enough to bid up prices but not affect production. At the same time, they are intentionally weakening the dollar by replacing it with Euros, which increases oil prices, and then profit when the currency returns to normal. We cannot trust them, and we can't keep begging them to increase production.
what other choice do we have? we cant invade saudi arabia; all we can do is ask them nicely to stop being pricks

for all his kissy-kissy and hand holding with the royal family, bush has done the worst job of any president in getting the saudis to make concessions.

or maybe its because all of bush's friends are texas oil men who are making so much money on this thing that they are unwilling to do anything to upset it.

Well the oil speculators are involved as well......

Oil is in a speculative bubble, just like he dot-coms of the late 90's. The speculators are indirectly working hand in hand with the producers to bid up oil prices, while the "analysts" try to keep up the hype by pegging higher and higher price targets per barrel (remember Henry Blodget and Amazon?). It's going to burst when the speculators can't push it any higher, and then will burst as the fundamentals kick in and drive it down to realistic levels.

Today's move (Oil off 2% along with gasoline/distillates) is likely the beginning of the burst.

Well, alot of those OPEC countries are arid, barren wastelands. Just tie the price of food to the price of oil. You charge too much for oil, wheat becomes $15/pound.
you think the world could create an effective food producers cartel?? way too easy to get around. too many small producers who would be willing to break the agreement.

you think the world could create an effective food producers cartel?? way too easy to get around. too many small producers who would be willing to break the agreement.

Small producers couldn't produce enough to counter the large-scale production. Their food would also be more expensive and insufficent to supply a large share of the market.

you think the world could create an effective food producers cartel?? way too easy to get around. too many small producers who would be willing to break the agreement.
Then punish the small producers by refusing to sell them pesticides, fertilizer, farm equipment, high tech items, and pharmaceuticals.

I thought that the EU was our equivalent of OPEC. We just have loads more stuff than just oil to export.

exactly how would this cartel work? demand that they sell us all we want at a lesser price or we'll not buy ANY? we'll go to their competitors and buy from THEM?
We back it up with the diplomatic and military clout of the US, and probably a bit from the growing influence of China.
if bush didnt have his tongue so far <deleted for decency> he would have had the saudis increase their production and lower the price just like every other president of the US has done.[/QUOTE]
Bush is in no real position to talk oil to OPEC. The US imports only about a quarter of its entire oil needs from OPEC. Asian nations import far more. As they are gaining in clout, they'll need the support of US diplomatic clout to back OPEC down. In addition, it'd lower prices for everyone.
I'm also sure that if one gets started, a lot of developing nations will probably join, too. They may not consume as much, but the poorer importers of oil loose precious money.

We back it up with the diplomatic and military clout of the US, and probably a bit from the growing influence of China.

Bush is in no real position to talk oil to OPEC. The US imports only about a quarter of its entire oil needs from OPEC. Asian nations import far more. As they are gaining in clout, they'll need the support of US diplomatic clout to back OPEC down. In addition, it'd lower prices for everyone.
I'm also sure that if one gets started, a lot of developing nations will probably join, too. They may not consume as much, but the poorer importers of oil loose precious money.
so with rising demand you think that we can all get together and force the opec countries to lower their prices? with what leverage? they know they have us "over a barrel"

i dont see it working unless you plan to invade the entire middle east.

I thought that the EU was our equivalent of OPEC. We just have loads more stuff than just oil to export.
Oh, I see. I just also love how Europe has nationalized all of its industries. The Italian steel company is doing pretty well, as is the French Vintage Cooperative. As long as it doesn't compete with the Spanish Vinters and Winecrafters Consortium.
Let's face it, kid. The EU exports most of its products through a market system, not through nationalized firms. That's OPEC. And even if you guys did have a cartel, it wouldn't work but for the strongest. Saudi Arabia is in the news often. Ever hear about Indonesia for its oil, or Gabon? They are also OPEC members who have seen their oil industries regulated from Riyadh. In short, cartels don't work. And unless you are a wealthy investment banker in Frankfurt, they won't work for the EU, either.

so with rising demand you think that we can all get together and force the opec countries to lower their prices? with what leverage? they know they have us "over a barrel"

i dont see it working unless you plan to invade the entire middle east.
There are other methods available. The OPEC nations need the world, and not just for the oil it buys. They need it for capital, imports, and aid. Don't forget that the US weilds more power in the Middle East than it has in decades.

There are other methods available. The OPEC nations need the world, and not just for the oil it buys. They need it for capital, imports, and aid. Don't forget that the US weilds more power in the Middle East than it has in decades.
so then WHY hasnt president bush gotten the same kind of cooperation from the saudis that every other president has gotten from them? even the presidents that didnt hold hands??

<more nasty sexual allusions deleted> AND the texas oilmen maybe he'd have time to work on this.

so then WHY hasnt president bush gotten the same kind of cooperation from the saudis that every other president has gotten from them? even the presidents that didnt hold hands??

<more nasty sexual allusions deleted> AND the texas oilmen maybe he'd have time to work on this.
I don't know why. However, you seem to like this issue simply to bash Bush. I'm looking beyond that. Quite frankly, I think that it will begin with a few Asian countries, and will spread from there rapidly. The US will be pressured to join, and probably will. But I see this as happening sometime in a few years, and not a few months.
Besides, this is good for the long term. Even if less oil were used, natural gas is becoming more popular. OPEC also has very sizable gas reserves. It is a solution for as long as we need fossil fuels.
Now, I think that if you wish to just bash Bush by using this issue, don't. Besides, when it comes to oil politics, the US will become less powerful, and fewer options will be had for Bush.

I don't know why. However, you seem to like this issue simply to bash Bush. I'm looking beyond that. Quite frankly, I think that it will begin with a few Asian countries, and will spread from there rapidly. The US will be pressured to join, and probably will. But I see this as happening sometime in a few years, and not a few months.
Besides, this is good for the long term. Even if less oil were used, natural gas is becoming more popular. OPEC also has very sizable gas reserves. It is a solution for as long as we need fossil fuels.
Now, I think that if you wish to just bash Bush by using this issue, don't. Besides, when it comes to oil politics, the US will become less powerful, and fewer options will be had for Bush.
i think this is one issue where he deserves bashing.

our best option is to push non-oil energy research. when we NEED less oil opec wont have power over us.

i think this is one issue where he deserves bashing.

our best option is to push non-oil energy research. when we NEED less oil opec wont have power over us.
And, of course, we could use that as a threat. Throwing money at an issue can work when there is money to spend. The US has sizable revenues and a rock solid credit rating. We could afford to fund alternative energy research at a size comparable to Social Security. It, I believe, would not be as effective as wholly private research, but this is OPEC. They are a bunch of statist lovers and welfare givers. They would believe that the government could lead a push away from oil even better than we do.

The IEA was set up by the US and other Western nations as a counter to OPEC after the 1973 oil embargo.

You can see what a splendid job they have done since.

The IEA was set up by the US and other Western nations as a counter to OPEC after the 1973 oil embargo.

You can see what a splendid job they have done since.
The IEA does nothing other than to issue reports and what not. Besides, at the time, the US was the only big consumer then. Now with a booming Asia, a counterfront may work better.

The IEA does nothing other than to issue reports and what not. Besides, at the time, the US was the only big consumer then. Now with a booming Asia, a counterfront may work better.
Sure, maybe they're doing a crap job, but I'm just saying that an international agency specifically set up to oppose OPEC already exists, and this is it.

How about kickstarting the "Organization of the Petroleum Consuming Countries", and let's just cut to the chase.

Sure, maybe they're doing a crap job, but I'm just saying that an international agency specifically set up to oppose OPEC already exists, and this is it.
It probably won't work if a counter-OPEC is ever to be effective. It'd have to be a supranational agency with power on par with the APEC or G8. And it'd have to be, at its core, a diplomatic agency, not a giant technocracy. After all, is the buyer supposed to know everything there is to know about a product? No.

How about kickstarting the "Organization of the Petroleum Consuming Countries", and let's just cut to the chase.
How about ingesting instead? The Organization for Petroleum Ingesting Countries, or OPIC. It's hq can even be near OPEC's in Vienna. Now that'll be fun.

How about ingesting instead? The Organization for Petroleum Ingesting Countries, or OPIC. It's hq can even be near OPEC's in Vienna. Now that'll be fun.
And it works for me, too. Just hope they don't mistakenly book the same conference centres for their get-togethers... room service alone would be a nightmarish proposition...

And it works for me, too. Just hope they don't mistakenly book the same conference centres for their get-togethers... room service alone would be a nightmarish proposition...
LOL!