Oil Monopoly Research Articles

The Oil Monopoly in the Arab World

The Arab world, a region steeped in history and culture, has been inexorably linked with the global oil industry for over a century. Its extensive oil reserves have not only catapulted the region into the international limelight but have also defined the socio-economic, political, and geopolitical landscape of the Middle East and North Africa (MENA). This article embarks on a comprehensive exploration of the historical roots, contemporary status, and multifaceted implications of oil monopolies in the Arab world, transcending mere economics to encapsulate the intricate tapestry of regional dynamics. As a geographical crossroads between Africa, Asia, and Europe, the Arab world's historical importance cannot be overstated. The region has been the cradle of civilization, the birthplace of major religions, and a pivotal hub for trade and knowledge exchange for centuries. However, it wasn't until the early 20th century that the Arab world underwent a transformation that would irrevocably alter its destiny: the discovery of oil.

Oil Pipelines: Eurasian geopolitical reconfiguration

The Caspian Sea is an important source of oil for the world, particularly Europe. However, the landlocked area was surrounded by neighbors who were commercial rivals and possessed major regional access routes. Examination of Eurasian oil pipelines evidences two large regions: Northern European and Mediterranean European systems involved in competition and collaboration in close quarters with competition and confrontation to reach the European markets from the Caspian Sea sources. With the demise of the Soviet Union, and driven by EU and US interests, as well as counting on their support, the Caspian region broke the Russian oil monopoly in less than a decade.

Helio Jaguaribe and Brazil´s Oil Question

When Helio Jaguaribe published his book “O nacionalismo na atualidade brasileira” (Nationalism in Brazil Today), its impact in Brazil´s developmental epistemic community was immediate. Among the nationalists who strongly advocated the 1953 Petrobras oil monopoly, the reaction was one of astonishment and outrage. In this article, it is argued that Jaguaribe did not seek to question the adequacy of the monopoly solution, but rather to frame the debate about the oil question on a more rational and pragmatic basis. Jaguaribe’s pioneering contribution would be followed by a rich intellectual debate of some decades between sociologists, political scientists, and economists about the significance of the Brazilian oil issue and the importance of the foundation of Petrobras in 1953 for economic development and Brazil´s affirmation in its quest for economic and political independence. The article also shows that at various times of his career Jaguaribe would return to the oil question, emphasizing in a lucid and pragmatic way, and, above all, imbued with a developmental spirit, its challenges, and possible solutions.

Monopolies: A Threat to Consumers or a Political Ploy

The United States Department of Justice recently announced an antitrust lawsuit against the search and search advertising giant, Google. Referencing anticompetitive practices that restrict competition and harm consumers, the DOJ, by attempting to break up Google’s control of the search market due to harm it is inflicting upon consumers as a result of its monopoly power, is continuing a policy of ensuring competitive markets that goes back more than a century to President Theodore Roosevelt and his crusade against trusts, and in particular, John D. Rockefeller’s Standard Oil Monopoly. Monopolistic behavior can take many forms, but opponents of monopolies, of which there are many, share the common criticism that monopolies are toxic for the economy and commit an injustice against individual consumers. Their solution to these harmful effects includes robust regulation and providing readily available detailed information to the public demonstrating the extent to which industry in the United States is concentrated. Unfortunately, while it is true that monopolies have the power to cause harm through the market power possessed by monopolies, it is equally true that monopolies are uniquely capable of taking actions that benefit the country, the economy, and consumers. The benefits of monopoly do not receive a lot of publicity because it’s not politically valuable and goes against the traditions of thought to which Americans have been subjected for well over a century. The fact that 10 percent of the world’s public companies generate 80 percent of all profits and the United States’ 100 largest companies have increased their share of GDP creation by 13 percentage points to 46 percent in two decades, it’s urgent to discuss monopolies more expansively and focus on the facts rather than political talking points.1 This paper will make the argument that monopolies are overregulated, which harms the economy and its consumers more so than it helps. Monopolies should be subject to less scrutiny in the U.S. economy to perform their functions more efficiently. Regulators have alternative means of guarding against the negative effects of monopoly while allowing for the positive effects.

Petrodollar recycling, oil monopoly, and carbon taxes

Besides affecting oil rents, climate policy can have far-reaching capital market implications. We identify a new general equilibrium transmission channel of climate policy on oil extraction by an oil monopolist who accounts for the influence of oil supply on returns on own petrodollar-financed capital assets. Climate-policy-induced adjustments in capital asset holdings by the exporting country lead to postponement of extraction under a wide range of reasonable parameter settings: for the reference calibration present extraction drops by 1.28 percent for an ad valorem tax corresponding to 100$ per ton of carbon, while it increases by 0.52 percent for a competitive oil market. This contrasts with the literature on supply-side effects of climate policy which neglects these capital market implications. Concerns about carbon taxes arising from unintended climate-damaging supply reactions are alleviated.

How Oil Contracts Affect Human Rights

Since the beginning of the 19th century, we have assisted major proliferation of the oil and gas industry. This phenomenon of exponential growth is due to the fact that oil companies hold the world’s oil monopoly on the extraction, processing and commercialization. Therefore, as being one of the most influential sectors in the world, is crucial to strictly regulate how oil and gas contracts concerns the potential environmental and social impacts arising from the conduct of petroleum operations and how such behavior affects the human rights. As a matter of fact, the social issues field is an emerging area, and despite such importance, oil contracts do not often deal with them in great detail, corresponding to an actual emptiness of the human rights provisions. In terms of responsibly, oil companies, have an inalienable obligation to ensure that their actions do not violate human rights or contribute for their violation. This study aims to trace a detailed analysis of the impact of the oil and gas agreements in human rights. In order to fully comprehend the deep effects of this industry, we will examine, in detail, numerous of published oil and gas agreements, as well as, decode which are the real standards and practices accepted by this industry. We will use a deductive and speculative reasoning. We will try to demonstrate how incipient and short protection is given to human rights and what responsible conducts must urgently be developed.

Comments: Volatility Trumps Stability

Editor's column Last month, OPEC received another warning that the battle for market share in the global oil market was not over. “It’s not beneficial for OPEC to deepen their cuts because prices will go up and shale oil producers and others will take OPEC’s market share,” Abdullah al-Attiyad, the former oil minister of Qatar, said in an interview with the Bloomberg news agency. “The problem is that there is someone waiting in the dark corner for OPEC—it’s shale oil producers and whenever prices rise, they raise production.” Al-Attiyad’s remarks came after the International Energy Agency reported that the oil market was not balancing as quickly this year as some had predicted. OPEC output rose to its highest level of the year in June and its compliance with production cuts slumped to 68%. Meanwhile, oil prices meander in the USD 45–50/bbl range and remain under pressure as US production remains strong. The oil market has historically been an interplay between supply and demand. But a new book by a consultant and former top energy adviser to US President George W. Bush argues that oil boom-and-bust cycles are here to stay and will likely be more volatile than those in the past. Periods such as from 2004 to 2008—when oil rose to USD 147/bbl and then dropped to USD 33/bbl—or what has happened between June 2014 and the present—prices falling from USD 107/bbl to USD 26/bbl and then back to around USD 50/bbl—could be the new norm. “Recent oil fluctuations mark the return of a new and unfettered market for crude oil and, as a consequence, boom-bust oil prices are making a return after 8 decades,” Robert McNally, who is also a fellow at the Columbia University Center on Global Energy Policy, writes in his new book Crude Volatility. Contradicting the current general consensus that US shale producers have replaced Saudi Arabia as the market’s swing producer—increasing supply as the market tightens and prices rise, and decreasing production as the market dictates—McNally argues that Saudi Arabia abandoned that stabilizing role in the mid-1980s, except for some occasional tinkering with global oil supplies in the 1990s, and shale producers are not cohesive enough to fill that role. The lack of a true swing producer explains the dramatic ups and downs of oil prices since 1998. McNally divides oil price history into 5 eras: the severe boom-bust cycles after oil’s discovery in Pennsylvania in the late 1800s; John D. Rockefeller’s Standard Oil monopoly that enriched him but stabilized prices; the return of volatility after the Standard Oil breakup and the discovery of huge quantities of oil in Texas, Venezuela, California, and Mexico beginning in the 1920s; price stabilization by the Texas Railroad Commission from the mid-1930s to 1972; and OPEC’s attempts to control the market. But OPEC has never had sufficient spare production capacity to truly control prices, McNally believes, and non-OPEC discoveries from Alaska to the Gulf of Mexico and elsewhere have undercut the cartel’s attempts. McNally believes that price swings in the range of USD 30/bbl to USD 100/bbl may be likely, playing havoc with governments that depend on oil revenues and companies trying to plan expensive projects. Oil cycle volatility is caused by basic economics—imbalance in supply and demand, which fuels price swings, which causes further sup-ply fluctuations. And because the industry is often surprised—whether it be the sharp growth in Asian demand in the early 2000s or the recent incredible growth in shale production in the US—it will be impossible to stabilize prices in the short term.

O papel do militar-estadista na construção do monopólio estatal do petróleo no Brasil

This paper examines the role of the armed forces as a key element in the state oil monopoly in Brazil, emphasizing the importance of nationalist current. The planning of the energy mix was the result of a joint effort between the different Armed Forces and the State. In the early twentieth century, this process was implemented, spontaneously, to ensure the energy supply necessary for economic development of the nation. For General Horta Barbosa, oil symbolized the growth and development of Brazil in the long term. To examine these questions, we begin to explain the importance of the Military Club as the think tank that stimulated discussions between the various currents. This period ended with the creation of the National Petroleum Council. With Dutra coming to power, the campaign “The oil is ours” was one of the important landmarks of the actions of the military in the state monopoly construction process. Oil, for these military statesmen, was capable of enormous economic progress, political and strategic for Brazil. During this period, General Horta Barbosa had to deal with the current liberal on multiple occasions in favor of the Brazilian state in search of political independence, economic and energy of the country.

Collecting Shakespeare: The Story of Henry and Emily FolgerStephen H.Grant. Baltimore: Johns Hopkins University Press, 2014.

Collecting Shakespeare: The Story of Henry and Emily Folger Stephen H. Grant. Baltimore: Johns Hopkins University Press, 2014.In 1882, at picnic of Irving Literary Circle of Brooklyn, Emily Jordan and Henry Folger, Jr., met for first time. Their subsequent marriage was based, in large part, on their passionate interest in William Shakespeare. Fifty years later at dedication of Folger Shakespeare Library, speaker accurately described their book collecting as the dream of their lives and to it they gave all they were, and much of what they (178). In his book, Grant stylishly explores adventure of their magnificent obsession.Buying rare books requires big money, but in his senior year at Amherst College, Henry Folger had nothing. To pay his tuition bill, Henry had to borrow from family of his classmate and friend Charles Pratt. Happily association between families led to making of Henry's fortune. Upon graduation, Henry entered Pratt business, world's largest kerosene refinery, and, in two years, paid off loan and earned degree. His reputation as brilliant statistician, meticulous record-keeper, and profitenhancing user of innovative technology caught eye of John D. Rockefeller. Folger became member of his inner circle at Standard Oil. When trust-bus ting forced oil monopoly to break up, Rockefeller appointed Folger head of Standard Oil of New York (Socony).Grant deals candidly with Henry Folger's corporate skullduggery. He became a key and willing player in high-stakes business on margins of law (60). In days before an income tax, he earned equivalent of over one million dollars annually. He shrewdly plowed much of that into buying stock in Standard Oil and in Magnolia Petroleum Company. To put it simply, Folger surreptitiously manipulated market and then invested with an insider's knowledge by letting supposedly independent Magnolia Petroleum Company act as front for Standard Oil. When he sold Magnolia Petroleum to Socony, his own company, he earned close to $400 million in today's dollars.Astonishingly, affluence never distracted him from plan to which he and his wife had dedicated themselves. It all went to fund their expensive habit: Henry and Emily spent most of their waking hours trying to find and buy every important book by, about, or related to William Shakespeare. The world of highrolling socialites held no attraction for them. …

Limit pricing and the (in)effectiveness of the carbon tax

We present a theory of limit-pricing monopoly in non-renewable-resource production. Facing a very inelastic demand, an oil monopoly seeks to induce the highest price that does not destroy its demand, unlike the conventional Hotellian analysis: The monopoly tolerates some ordinary substitutes to its oil but deters high-potential ones. With limit pricing, policy-induced extraction changes do not obey the usual logic. For example, oil taxes have no effect on current oil production. Extraction increases when high-potential substitutes are promoted, but can be effectively reduced by supporting ordinary substitutes. The carbon tax not only applies to oil; it also penalizes its ordinary (carbon) substitutes, whose market shares are taken over by the monopoly. Thus, the carbon tax ambiguously affects current and long-term oil production and carbon emissions.

Rethinking the Economic Basis of the Standard Oil Refining Monopoly: Dominance Against Competing Cartels

The success of the Standard Oil monopoly is not well understood. Standard Oil first developed a monopoly over the refining of crude oil, though later extended its control to gathering pipelines, later still to trunk pipelines (from the western Oil Regions to East Coast ports) and, even later, expanded operations to include oil production (drilling) and retail sales at the time the Supreme Court ordered its dissolution 100 years ago, in 1911. Though there are several journalistic exposes of Standard Oil - Henry Demerest Lloyd and Ida Tarbell - as well as business histories - none very explanatory - the currently dominant theory of Standard Oil’s success is by Elizabeth Granitz and Benjamin Klein who assert that Standard Oil was chosen by oil shippers, the railroads, to police a railroad cartel. According to Granitz and Klein, the railroads split with Standard Oil the profits from cartelization of the crude and refined oil industry. This paper challenges that explanation, claiming that there were attempts to cartelize at all levels of the oil industry - producers, gathering pipelines, refiners, and the railroads. There are good economic reasons that explain why Standard Oil, a refiner and at the remote western location of Cleveland, secured a monopoly as against the producers and the railroads.

Access Pricing Policy Reform Suggestions in Chinas Natural Gas Pipeline Industry Based on the Experiences in America

The growing natural gas consumption asks for larger scale of pipelines and arouses criticism on separation pipelines business from national oil and gas monopoly companies in China. Through reviewing of Americas regulatory practices on access pricing policy in the gas pipeline industry and summarizing the evolution of access pricing theory on network economics, we conclude some suggestions on the reform process of Chinas pipeline access regulation policy by comparing and contrasting the industrial environments major differences between China and America. We emphasize the importance of executing non-discrimination access price policy in the spirit of Anti-Monopoly Law and indicate that simple separation isnt the most effective way to increase social welfare nowadays. Regulatory agency should prohibit abusing market power and decrease cost information asymmetric in cross-subsidy activity.

Oil Monopoly and the Climate

This paper takes as given that (i) the burning of fossil fuel increases the carbon dioxide content in the atmosphere, which (ii) in turn leads to global heating and global climate change of a variety that, (iii) on net, is harmful to our welfare. To answer questions about the policy implications of this, a comprehensive and quantitative analysis of the two-way interaction between the economy, with its fossil fuel use, and the climate is necessary. In this paper, however, we focus on a particular aspect of this interaction: the role played by the industrial organization in the oil-producing sector of the world. Without a clear understanding of the world market for oil, the consequences of taxes and other policy instruments cannot be evaluated. Analyses of the world oil market that are based on perfect competition and a finite amount of oil typically predict (i) that the oil price satisfies the Hotelling rule, i.e., increases so that the rate of return on storing oil is equal to the return on the capital market, (ii) that oil consumption follows a decreasing path, and (iii) that extraction is sequential in the sense that sources with lower extraction costs are depleted before high-cost sources are used. All these predictions are problematic to reconcile with data. Our main point here is that the polar opposite case—where oil is supplied by a large agent with zero extraction costs who internalizes the effects of his decisions on all aggregates—seems useful for understanding historic and future developments in the oil market.

How to Break Both Oil's Monopoly and OPEC's Cartel

OPEC met in Vienna and decided to enact an effective oil production cut of half a million barrels a day (mbd), reducing overall OPEC supply to 28.8 mbd. This cut, a deliberate effort to prop up prices despite the worsening global economic crisis, was quite in character for the oil cartel. OPEC produces today about as much oil as it did thirty years ago despite its ownership of 78 percent of global proven reserves of conventional crude oil and even though the global economy and nonOPEC production have doubled over the same period. And this OPEC domination of more than three-quarters of the world’s crude is more than matched by oil’s monopoly of over 95 percent of the world’s transportation fuel. This meager OPEC production level is more stunning in light of the fact that in 2007, the cartel expanded its member roster to include Ecuador and Angola, which together produce about as much oil as Norway. Deeply embroiled in a struggle against radical Islam, nuclear proliferation, and totalitarianism, the U.S. faces a crude reality: Saudi Arabia and Iran, the same Sunni and Shi‘ite theocratic and dictatorial regimes that most strongly resist America’s efforts to bring democracy and the rule of law to the Middle East, will increasingly sit in the driver’s seat of the global economy. As the leading countries of OPEC they are in more of a position each year to thwart each and every U.S. foreign policy priority. While the U.S. economy bleeds, petrodictatorships around the world—even at oil prices well below last summer’s stunning $145 peak—are on the receiving end of staggering windfalls. With 10 percent of the world’s oil reserves and the world’s second largest natural gas reserve, Iran’s President Mahmoud Ahmadinejad seems unfazed by the prospects of international sanctions against his country as a result of its efforts to develop nuclear weapons. Oil also lubricates the so-called Bolivarian revolution led by Venezuela’s President Hugo Chavez, who is using Venezuela’s oil wealth to buy political influence in the Western Hemisphere and to consolidate, now with Russia’s help, an anti-U.S. bloc in the region.

The Spanish Gasoline Market: From Ceiling Regulation to Open Market Pricing

This paper examines the evolution of the Spanish gasoline market from the abolition of the state oil monopoly (January 1993) to "complete" liberalisation (October 1998). With the restructuring of the Spanish oil sector during the 1980s and early 1990s, a highly concentrated oligopoly emerged in the automotive fuels market. A system of price ceilings replaced the state administered prices in July 1990. Since then, new domestic and foreign operators have entered the market, particularly along the coast, near import terminals. Prices went up and then declined. These developments can be explained by an interplay of factors such as: the gradual decline in co-operation among the Spanish firms; the loss of market share of the largest of these, Repsol; the entry of independent operators and supermarkets; and the impact of the ceiling price system. By mid-1998 this system was abolished as the government considered it an "impediment" to further market liberalisation. However, some crucial barriers to the entry of new suppliers remain.

The Prize: The Epic Quest for Oil, Money, and Power

Written by the author of Shattered Peace and Energy Future, this book tells the history of oil and the struggle for wealth and power that always surrounds it. As much a history of the modern world as of the oil industry, the book reveals oil's critical role in world events, from Japan's attack on Pearl Harbour to the Suez Crisis, from Yom Kippur to the Gulf War. The book includes the story of Shell Oil, a company forged in defiance of the Standard Oil monopoly by an upstart London trader, using Rothchild connections, Russian oil and Dutch petrolium concession in the East Indies, and the inside story of the discovery of North Sea Oil and its crucial role in undermining the OPEC monopoly. The book is a TV tie-in edition with the major eight-part BBC TV series.

The Spanish oil sector From state intervention to free trade

This article describes how the entrance of Spain into the EC forced the Spanish oil sector to reorganize its relatively inefficient and backward structure in anticipation of future competition and in harmony with EC rules. To protect the Spanish industry over a transitional period, Spain replaced its former legal oil monopoly by a de facto monopoly. Recent developments show, parallel with the development of a strong, partly privatized, state oil company, the gradual disintegration of this system. This is forcing the smaller private Spanish oil companies to establish partnerships with foreign consortia to secure their positions in their home market.

Antitrust and the Oil Monopoly: The Standard Oil Cases, 1890-1911. Bruce Bringhurst

Previous articleNext article No AccessBook ReviewsAntitrust and the Oil Monopoly: The Standard Oil Cases, 1890-1911. Bruce Bringhurst Kenneth G. ElzingaKenneth G. Elzinga Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 88, Number 5Oct., 1980 Article DOIhttps://doi.org/10.1086/260925 Views: 3Total views on this site Citations: 1Citations are reported from Crossref Copyright 1980 The University of ChicagoPDF download Crossref reports the following articles citing this article:James A. Dalton, Louis Esposito Standard Oil and Predatory Pricing: Myth Paralleling Fact, Review of Industrial Organization 38, no.33 (Feb 2011): 245–266.https://doi.org/10.1007/s11151-011-9280-1

Constraints on the world oil monopoly price: A comment

Constraints on the world oil monopoly price: A comment

Constraints on the world oil monopoly price

The consuming nations have the power to damage or wreck the world oil monopoly, but prefer cooperation, because of their fixed belief that otherwise the market will fail to clear, and generate a ‘gap’. Yet they may use the power inadvertently. The monopoly acts essentially as a loose cartel with a safety net: a large seller (Saudi Arabia) could act as restrictor of last resort. But this would maximize Saudi profits at a much lower price, penalizing the other sellers. The conflict can be held off by ad hoc agreements while raising the price. But the risk of conflict and highly uncertain long-run demand and supply make it likely that the cartel will only slowly and gradually approach profit- or wealth-maximization. ‘Political objectives’ coincide with economic and can be neglected.