In your International Economics textbook, Carbaugh (2017, Chapter 7) provided a historical account of OPEC and its power in controlling the global petroleum supply. In a critical essay, investigate...

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Running Head: OPEC ANALYSIS
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OPEC ANALYSIS
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Introduction
The Organization of Petroleum Exporting Countries (OPEC) is formed by the nations selling petroleum and have more control over the petroleum prices and manages the competitive environment in the petroleum market (Mo
iss & Meiners, 2014). OPEC mainly aims at maximizing the profit of all the member countries. It reduces the problems faced by the countries selling petroleum due to price inequalities. OPEC gained full control over the petroleum products in the world, and they were deciding on the supply and price of the commodities based on the demand and availability of the product. With the increase in the growth and development, there is increasing demand for the petroleum products that resulted in changes in the OPEC price. In the paper, there is a more detailed analysis of the dynamics OPEC has faced in the global market in last ten years.
Analysis
Algeria; Angola; Ecuador; Equatorial Guinea; Gabon; Iran; Iraq; Kuwait; Libya; Nigeria; Qatar; Saudi Arabia; United Arab Emirates and Venezuela are the OPEC member countries (OPEC, n.d.). The mission of OPEC is to unify and coordinate the petroleum prices and policies of all the member countries and focuses on stabilizing the oil market to ensure that there is market efficiency. OPEC focuses on economic development of member countries, regularize the supply of oil, generating regular income to the member countries and to ensure that the member countries are generating a fair return on investment.
OPEC countries have majority portion of the oil reserves in the world when compared to the non-OPEC countries. OPEC countries have 81.5% of the world’s crude oil resources and Middle East countries have 65.5% of the OPEC resources (OPEC, 2016). Crude oil prices were highly volatile in the past ten years especially during 2008 and 2009 during the great recession in the United States. The ba
el price was over $100 during that period. Post-2009, the crude oil prices fell dramatically as shown in the below graph.
Source: Statista, 2016.
The main problem for the large fluctuation in the prices is the poor control over the supply of the oil by the OPEC countries. The price per ba
el during 2006 was about $61 per ba
el, it increased to $69.04 per ba
el during 2007 and raised further to $94.1 during 2008, and it fell to $60.86 per ba
el by the end of 2009. The price slightly raised to $77.38 per ba
el in 2010, it further increased to $107.46 in 2011 & $109.45 in 2012 and $105.87 during 2013 (Statista, 2016). The price fell to $96.29 in 2014 and drastically decreased to $49.49 in 2015 and $40.68 in 2016 (Statista,...