THE POLITACTICS OF INTERNATIONAL CARTELS: ECONOMIC ILLUSIONS, POLITICAL REALITIES, AND OPEC

Since the Organization of Petroleum Exporting Countries (OPEC) arose as a result of the previous practices of cartels, certain expectations about its behavior and longevity have caused most experts to classify it as a cartel. This research investigates the nature and strategy of international cartels to determine both what constitutes a cartel and the causes of OPEC's longevity. To achieve that end, the study examines the political and economic background that led to the Organization's creation and determined its evolution. The study analyzes the factors underlying changes in the oil market and in the outlook of the oil-producing nations for the purpose of drawing some conclusions concerning the manner in which the contemporary, quasi-cartelistic OPEC system operates, and to set out the far-reaching implications of its emergence.;What were the circumstances which have thus far favored cartelization and sustained the cohesiveness and power of OPEC? How did OPEC succeed in devising this cohesive policy in spite of its membership's heterogeneity? How did it prevent internal conflicts and satisfy the often contradictory goals of its members? This study argues that links within OPEC have been forged by a mixture of politics and economics. Economic considerations created OPEC and maintained it through its early years, but political necessity and solidarity helped later to cement the various divergent blocks together. Contrary to expectations, political conflicts among the major members failed to cripple or destroy OPEC. Political links helped override economic disagreements, while economic links helped overcome political ill will.;Traditionally, cartels were characterized by impermanence. Consequently, when OPEC was formed in 1960 most analysts underrated its potential and its ability to survive. However, OPEC did manage to sustain economic and political tests for over 20 years. Its cohesion continues to surprise most observers.