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Assessing OPEC's Conflicting Motives

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The New York Times (Nov 30, 1993) reported that 'the inability of OPEC to agree last week to cut production has sent the oil market into turmoil...[leading to] the lowest price for domestic crude oil since June 1990.'
a) Why were the members of OPEC trying to agree to cut production?
b) Why do you suppose OPEC was unable to agree on cutting production? Why did the oil market go into 'turmoil' as a result?
c) The newspaper also noted OPEC's view 'that producing nations outside the organization, like Norway and Britain, should do their share and cut production.' What does the phrase 'do their share' suggest about OPEC's desired relationship with Norway and Britain?

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Solution Summary

This solution assesses the motives behind OPEC members' inability to agree on production levels, as reported in a 1993 New York Times article.

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a) The decrease in supply would drive up the price of oil, increasing the revenues of OPEC's members.
b) Tensions between OPEC members, ...

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