OPEC Members - Pros/Cons
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PROS
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forum for discussion and decisions; alleviates some potential for conflict
organized effort reduces stress from a chaotic competitive market
coordinates oil production policies, stabilizes the oil market 1
also ensures a stable supply of oil for consumers 1
provides news and information flow (OPEC Secretariat) 1
combined strength in the international market; "greater than the sum of its parts“
CONS
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difficult to control members; lacks an accountability mechanism
may provide incentive for members to cheat
loss of competitive potential of members as individual producers
Saudi market share gives it the strongest position in the organization
limited actual control over prices; exerting influence detrimentally affects the oil
market
1The
Organization of the Petroleum Exporting Countries (OPEC) Functions.
<http://www.opec.org/aboutus/functions/functions.htm>