OPEC and the Price of Petroleum: Theoretical Considerations and Empirical Evidence

1. 1. Oil price fluctuations and their impact on economic performance Drastic oil price fluctuations have been a major characteristic of the world petroleum market since the beginning of the seventies. The oil crises of 1973n4 and 1979/80 were followed by a dramatic drop of the oil price during the first two quarters of 1986. Starting from a level less than 2 $ per barrel in 1972, the spot market price of Arabian Light crude oil increased to some 35 $ in 1980, then slowly decreased, and fin...