The decline of OPEC

Since 1973 the OPEC meets more and more problems in protecting and reconciling both the individual and collective interests of the member states. Differences in oil reserves, production capacities, dependence of oil revenues and the extent of vertical integration revealed opposite interests with regard to the price and production level. Moreover there is the problem of the economic weaker OPEC countries how to realize the necessary investments in the oil industry. It is only possible to attract foreign capital if they abandon agreements concerning restrictions of oil production. The resignation of Ecuador shows that cancellation of the OPEC membership than is only a logical consequence. Attention is paid to the developments which have lead to the above-mentioned problems. The main causes are the two oil crises in 1973, 1979/1980, and the strong reduction in oil prices in 1986. Also the necessity to extend the production capacity and to renovate existing capacity in order to fulfill the demand of lighter oil products and newly implemented environmental legislation has led to investment problems of the international oil industries. 2 figs., 17 refs