In about 500 words, briefly discuss which of the various models of industry structure and pricing behaviour is most appropriate in examining the behaviour of the oil market and what insight the model or models provide about the behaviour of oil prices. (Feel free to provide graphs or tables whenever necessary)

Please cover the following points mentioned below when addressing the prompt above:

(i) OPEC: founded 1960; motivated by opening up of the fields of the Middle East and the development of new technologies ? oversupply and falling prices (Daniel Yergin, “The Quest,” Chapter 11: Is the World Running Out of Oil?”)

Changes to their quota system over time

(ii) Saudi Arabia as swing producer; role it explicitly took on in 1984

(iii) Major suppliers outside of OPEC: Russia, Canada, US, Kazakhstan, Mexico

(iv) Nationalising of oil companies in 1960s and 1970s

(v) Consolidation of the oil industry into ‘majors’ in 1980s.

Note: Clarity of presentation as well as content will be taken into account when the report is marked. Any additional statistics, charts or diagrams should be included, with accompanying discussion, only in the main body of the text.