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Cooperate or Compete? Insights from Simulating a Global Oil Market with No Residual Supplier

Author

Listed:
  • Bertrand Rioux
  • Abdullah AlJarboua
  • Fatih Karanfil
  • Axel Pierru
  • Shahd Alrashed
  • Colin Ward

    (King Abdullah Petroleum Studies and Research Center)

Abstract

Structural changes in the global oil sector are disrupting conventional market dynamics and the roles played by competing and cooperating producers. Industry players are adjusting to the shale (or ‘tight’) oil revolution and the possibility of plateauing or peaking global oil demand. In particular, OPEC and Saudi Arabia, its top producer, are reshaping the organization’s role as the primary residual supplier to the world oil market. In recent years, OPEC has invited other major exporters, including Russia, to cooperate under the OPEC+ production agreement in an effort to stabilize prices.

Suggested Citation

  • Bertrand Rioux & Abdullah AlJarboua & Fatih Karanfil & Axel Pierru & Shahd Alrashed & Colin Ward, 2020. "Cooperate or Compete? Insights from Simulating a Global Oil Market with No Residual Supplier," Discussion Papers ks--2020-dp13, King Abdullah Petroleum Studies and Research Center.
    • Handle: RePEc:prc:dpaper:ks--2020-dp13
    DOI: 10.30573/KS--2020-DP13
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    References listed on IDEAS

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    1. Bassam Fattouh & Lavan Mahadeva, 2013. "OPEC: What Difference Has It Made?," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 427-443, June.
    2. Golombek, Rolf & Irarrazabal, Alfonso A. & Ma, Lin, 2018. "OPEC's market power: An empirical dominant firm model for the oil market," Energy Economics, Elsevier, vol. 70(C), pages 98-115.
    3. Brown, Jason P. & Maniloff, Peter & Manning, Dale T., 2020. "Spatially variable taxation and resource extraction: The impact of state oil taxes on drilling in the US," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    4. Hamilton, James D., 2003. "What is an oil shock?," Journal of Econometrics, Elsevier, vol. 113(2), pages 363-398, April.
    5. Peter Erickson & Adrian Down & Michael Lazarus & Doug Koplow, 2017. "Effect of subsidies to fossil fuel companies on United States crude oil production," Nature Energy, Nature, vol. 2(11), pages 891-898, November.
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    Cited by:

    1. Karanfil, Fatih & Omgba, Luc Désiré, 2023. "The energy transition and export diversification in oil-dependent countries: The role of structural factors," Ecological Economics, Elsevier, vol. 204(PB).
    2. Durand-Lasserve, Olivier & Pierru, Axel, 2021. "Modeling world oil market questions: An economic perspective," Energy Policy, Elsevier, vol. 159(C).

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    • F0 - International Economics - - General

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