(a juxtagraph is a prose poetry form, best described as “a collage of facts.”)
OIL: A JUXTAGRAPH
In 2018, the world produced thirty-six billion, seven hundred and eighty-eight million, three hundred and fifty thousand barrels of oil, or about one thousand, one hundred, and sixty-six barrels per second.
In 1975, Gulf Oil held a series of seminars to educate the Nigerian public on the benefits of the crude Gulf was lifting from that nation’s Delta Region. For comic relief, out came Mr. Emmanuel Omatshola’s Magic Barrel, a magician who produced an endless bounty from a steel drum: gasoline, kerosene, insecticides, nylon socks, rubber shoes, lipstick & rouge, paint for houses, cellophane to wrap fish and meat.
All humanity clusters around Mr. Omatshola’s barrel. We depend on its generous depths. No one knows where lies the barrel’s bottom.
OPEC has not had effective pricing power for well over thirty years.
OPEC only had control over world oil prices between 1973 and some unspecifiable point in the early 80s, and only because prices were generally rising then anyway.
During the 70s, the price of oil shot through the roof. Many trembled in awe before the power of OPEC. However, while OPEC was being so powerful, investment in oil exploration and production cranked into high gear. Over time, this resulted in greatly enhanced world oil production. In 1982, a worldwide recession caused demand for, and the price of, oil to go into the basement. Even after the economy recovered, oil prices did not, and, with the exception of an anomalous spike in 1990 due to the First Gulf War, they stayed in that basement until the turn of the century.
OPEC couldn’t do jack squat about low oil prices. The members would meet and set restricted quotas, trying to prod the market. Then they would all go home and cheat on those quotas. They had to; most of them had nothing else to drive their economies. This is problem with cabals.
In 1998, after the Asian financial crisis cut demand, oil was going for $12 a barrel.
(Not coincidentally, those years saw America fall in love with SUVs.)
Since 2000, we’ve had a dramatic price rise caused by production declines meeting growing demand. Which meant…investment in exploration & production cranked into high gear! Leading to our current price sink. It’s a cycle. And OPEC can’t do jack squat about it.