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Oil and Gas Industry: A Research Guide

Organizations and Cartels

A cartel, as defined by the Organisation for Economic Co-operation and Development (OECD), is when firms create a formal agreement to "raise or fix prices and to reduce output in order to increase profits." This agreement harms consumers because it makes products unavailable or overly-expensive.1 Industries that are made up of a few large companies, have high start-up costs, and produce less complex goods are more likely to collude on price and production. Historically, cartels have existed in the steel, railroad transportation, and vitamin industries.2 In the oil and gas industry, the Organization of the Petroleum Exporting Countries (OPEC) is often used as an example of a cartel. Although there is debate around whether the economic evidence demonstrates it is a true cartel, OPEC's member countries do exert market influence.3

Prior to OPEC, the oil market was dominated by seven major oil companies often known as the Seven Sisters, who colluded to manipulate price and production, sometimes under the direct request of the U.S. Government, and other times investigated by the U.S. Government for violating antitrust laws.4 After World War II, faced with threats of nationalizing oil production, the Seven Sisters agreed to split oil profits fifty-fifty with oil exporting countries. However, as competition from Russian oil increased, Standard Oil of New Jersey (Exxon) concluded they needed to drastically reduce oil prices. The other majors reluctantly followed suit, which ultimately reduced income to the oil exporting countries. In 1960, as a response to the price drop, the oil exporting countries created OPEC to diminish the influence of multinational oil companies.5

Organization of the Petroleum Exporting Countries (OPEC)

OPEC is a permanent, intergovernmental organization (IGO) created at the Baghdad Conference on September 10-14, 1960. It was an outgrowth of the 1st Arab Petroleum Congress in 1959 when the Oil Consultation Commission, created by a few of the oil producing countries, signed what was known as the Maadi Pact. Its current mission is to coordinate petroleum policies between its member countries with the goal of stabilizing the oil market for consumers, producers, and investors. A number of countries have sought various agreements and acts to limit the impact of OPEC on the global oil market.

The following title links to fuller bibliographic information in the Library of Congress Online Catalog. Links to additional online content are included when available.

International Energy Agency (IEA)

The International Energy Agency (IEA) is one of the larger organizations involved in the oil and gas industry. Formed by the Organisation for Economic Cooperation and Development (OECD) as an autonomous intergovernmental entity in 1974 in direct response to the oil crisis, the IEA is the energy forum for 30 countries External. The original mission of the IEA External was to seek ways to reduce the members' vulnerability to a supply disruption. While still a major objective—its member countries must demonstrate that their governments have immediate access to 90 days of oil reserves—the IEA also covers the full range of energy issues, from security to environmental awareness.

Organization of Arab Petroleum Exporting Countries (OAPEC)

The Organization of Arab Petroleum Exporting Countries (OAPEC) was established in 1968 and is based in Kuwait. While they have members in common, the OAPEC differs from OPEC in that its membership is limited to petroleum-producing Arab countries. The three founding members were Kuwait, Libya, and Saudi Arabia. The 1973 oil embargo was driven by some members of OAPEC. After the embargo, oil prices quadrupled and, unlike previous embargos, did not revert pre-embargo prices.6 OAPEC is devoted to developmental activities and increasing the cooperation among its members. To that end, its members have formed a variety of ventures, including the Arab Petroleum Investment Corporation (APICORP).

International Oil and Gas Organizations

National Oil and Gas Associations

Natural Gas Council is made up of five associations that cover the entire United States oil and gas industry, "from the wellhead to the burner tip." Leadership rotates each year between the associations.

Many countries have their own industry associations. For example: 

Searching the country's name and the keywords oil industry association or gas industry association will yield relevant websites. Note the text may only be available in the country's official language.  

Library of Congress Catalog Searches

Additional works on organizations in the oil and gas industries in the Library of Congress may be identified by searching the Library of Congress Online Catalog under appropriate subject headings. Choose the topics you wish to search from the following list of Library of Congress subject headings to link directly to the Catalog and automatically execute a search for the subject selected. For assistance in locating the many other subject headings which relate to this subject, please consult a reference librarian.

Also see publications in our collections authored by these organizations:

Notes

  1. Organisation for Economic Co-operation and Development, "Cartel," Glossary of Statistical Terms External (last modified March 15, 2002); Organisation for Economic Co-operation and Development, Cartels and anti-competitive agreements External (accessed May 17, 2019). Back to text
  2. Andrew R. Dick, "Cartels" in Concise Encyclopedia of Economics, External ed. by David R. Henderson (1993). The Library of Economics and Liberty (accessed May 17, 2019). Back to text
  3. Jeff D. Colgan, "The Emperor has no Clothes: The Limits of OPEC in the Global Oil Market," External International Organization 68, no. 3 (Summer, 2014): 599-632. Back to text
  4. As an example, see International Petroleum Cartel, Staff Report to the Federal Trade Commission [PDF], released through Subcommittee on Monopoly of Select Committee on Small Business, U.S. Senate, 83d Cong., 2nd session (Washington, DC, 1952). Back to text
  5. Anthony Sampson, The Seven Sisters (The Viking Press, Inc.: New York, 1975), 108-112, 156-165. Back to text
  6. A.F. Alhajji, "The Oil Weapon: Past, Present and Future." Oil & Gas Journal 103, no. 17 (May 2005): 22-25,28,30,32-33. Back to text