why isn't there a competitor to OPEC?

[BlahBlahYouToo]

or at least a more prominent one.
according to wiki, there is OECD which i've never even heard of before.

OPEC is responsible for 44% of the world's crude oil production, but hold 79% of reserves.
can other nations join forces and break this 'monopoly'?

someone school me because apparently i lack any understanding of how any of this works.

 

[Nebor]

It's more lucrative to participate than to go against the grain.

 

[BlahBlahYouToo]

It's more lucrative to participate than to go against the grain.

yeah, i guess so.
higher prices means more profits.

 

[Anarchist420]

It's kind of hard to have good competition when the natural resources are owned by a government.

 

[ProfJohn]

The crude oil market is very tight so a country with even a small part of the market can cause major price issue.

Therefore a group that controls 44% of the market can cause havoc.

There is no competitors because no one can mass together a large group of countries and even if they did OPEC could still hold the world hostage with its 44% of production.

Keep in mind that membership in OPEC is political as well oil based.

 

[Anarchist420]

The crude oil market is very tight so a country with even a small part of the market can cause major price issue.

Therefore a group that controls 44% of the market can cause havoc.

There is no competitors because no one can mass together a large group of countries and even if they did OPEC could still hold the world hostage with its 44% of production.

Keep in mind that membership in OPEC is political as well oil based.

Actually, there are no competitors because governments control everywhere that oil can be extracted from, not because enough countries don't control the oil supply.

If the middle eastern countries were the only countries without a free market in land and water, then OPEC would see its 44% share sharply drop overnight, and eventually it would go to zero.

 

[wuliheron]

or at least a more prominent one.
according to wiki, there is OECD which i've never even heard of before.

OPEC is responsible for 44% of the world's crude oil production, but hold 79% of reserves.
can other nations join forces and break this 'monopoly'?

someone school me because apparently i lack any understanding of how any of this works.

Its called supply and demand. Whoever has the supply can make the demand. Of course, if the other nations want they can use guns to make their own demands and try to break up the monopoly, but that gets expensive fast. Instead they usually settle for buying a local dictator or otherwise find a cheap deal.

 

[yllus]

Competition? Heck, I want Canada to join OPEC so we can rake in more cash...

 

[Schadenfroh]

Competition? Heck, I want Canada to join OPEC so we can rake in more cash...

Export quotas might mean less cash for Canada, best to let them manipulate the price and then over-produce to reap the benefits.

 

[lothar]

Export quotas might mean less cash for Canada, best to let them manipulate the price and then over-produce to reap the benefits.

In 2008 near the top of the commodity bubble, Saudi Arabia increased production while OPEC was all about keeping the same quota.

Oil then crashed from ~$120 all the way down to $35.
Saudi Arabia reaped the benefits by producing oil when the was trading at $110/barrel against OPEC's quota wishes.

The same thing happened this year as well.
Oil went to $105-110, OPEC foolishly voted 6-5 against raising quotas last month(or was it earlier this month?).
Saudi Arabia and it's allies have since then voluntarily increased production above their quota limit. Oil is now $91/barrel, expect it to drop more as the economy hobbles along and with the news report today of Obama opening the strategic petroleum reserve.

The prudent thing to do for any country with oil would be to NOT be a part of OPEC.
Think of it as "privatize the profits, socialize the loses."

Another way to think of it is this:
Honda and Toyota workers earn more in benefits and compensation than their unionized counter parts at the UAW in Ford, GM, and Chrysler and they've been doing so for a while now(for at least 6-7 years if not longer).
And the employees also don't have to pay a certain percent of their salary to a union boss either. The employees at the Honda and Toyota plants have also rejected unionization.