oil shocks: Any oil-producing nation round the world unwise enough to try undercutting world market prices, as decided by the oil cartel the so-called Seven Sisters found themselves simply blocked out of the global system of handling, refining, distribution and marketing which the majors controlled, according to The Japan Times. At times this formula did not work. Could it now be heading back into just that situation And are the days of oil shocks of the last century, which did so much damage to the Japanese economy indeed to the world economy at last over From World War II up to the 1970s it was left to the giant oil majors, dominated by the Americans, to stabilize the price of a barrel of oil, keeping it not too low to damage their profits or to deter new investment, but not too high to impinge on the access of every American to a reasonably cheap and reliable supply of fuel roughly in the 3 a barrel range now about 22 . ; They did this by ruthless cartel operations, some just acceptable and some, at least by today's standards, distinctly dodgy. For example, in 1967, thanks to Middle East oil incontinence the posted price per barrel for Arab Light crude sank briefly to 80 cents. How were American and other great oil corporations to compete with that Answer, with difficulty and ingenuity, partly by themselves investing in the cheap oil regions outside the United States, partly by highly favorable domestic U.S. tax arrangements the famous depletion allowance and above all by ensuring a friendly face in the White House. And in the late 1960s the overall production price of Saudi oil, including all the overheads, was 10 cents.
(news.financializer.com). As
reported in the news.
Tagged under oil shocks, japanese economy topics.