OPEC production quotas and their application to non-OPEC countries

Gault, John; Karbassioun, Bahman; Spierer, Charles; Bertholet, Jean-Luc

doi:10.1016/0301-4215(90)90172-z

Cited by 5 publications

(4 citation statements)

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“…Furthermore, violations of allocated quota by members of OPEC have often been linked to perceived unfair distribution of the quotas to each state (see Ait-Laoussine, 1997). This is consistent with the conclusion by Gault et al (1990) that the perception of fairness among the members increases with 'explicit allocation formula'. Other media sources such as Sider and Faucon (2016) confirmed the cheating practices in OPEC by revealing that the cartel is unable to enforce any punitive measures on defaulting members with a view to ending such behaviour.…”

Section: A Review Of Related Studiessupporting

confidence: 92%

“…OPEC's production quota decisions have been widely studied since the inception of the policy in the early 1980s (see Kaufmann et al, 2004;Al-Saif, 1997;Morse, 1997;Alsalem et al, 1997;Gault et al, 1990;Mabro, 1989). For example, Gault et al (1990) examined OPEC behaviour vis-à-vis their quota system and find that from February 1998, arbitrary allocations with undisclosed basis generally define OPEC's imposed production cuts. Furthermore, violations of allocated quota by members of OPEC have often been linked to perceived unfair distribution of the quotas to each state (see Ait-Laoussine, 1997).…”

Section: A Review Of Related Studiesmentioning

confidence: 99%

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Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

Ibrahim

Omoteso

2022

IJGEI

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Within the context of a target oil price band regime, this paper posits that cheating behaviour in OPEC has ethical and accountability implications for the organisation. It also impacts on its reputation and ability to ensure stable and fair oil prices in the oil markets. Based on data sets covering the period from 2000 to 2012 (i.e. production quota era), analysed using the Vector Auto-Regression/Vector Error Correction (VAR-VEC) framework, the study's results indicate that OPEC cheating, mainly instigated by the amount of spare production capacity available to OPEC members, does not seem to have a significant direct effect on international oil prices. However, the degree of cheating by OPEC member-states might disrupt its ability to maintain surplus capacity enough to reduce price speculation in the oil markets. Should cheating behaviour in OPEC continue unabated, this could jeopardise an effective energy regulatory framework and market transparency. The paper, therefore, recommends a policy action in OPEC to support the redesigning of the existing quota system that is fair and just to its members and capable of controlling any cheating behaviour.

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Section: A Review Of Related Studiessupporting

confidence: 92%

Section: A Review Of Related Studiesmentioning

confidence: 99%

Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

Ibrahim

Omoteso

2022

IJGEI

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show abstract

“…OPEC's production quota decisions have been widely studied since the inception of the policy in the early 1980s (see Kaufmann et al, 2004;Al-Saif, 1997;Morse, 1997;Alsalem et al, 1997;Gault et al, 1990;Mabro, 1989). For example, Gault et al (1999) examine OPEC behaviour vis-à-vis their quota system and find that from February 1998, arbitrary allocations with undisclosed basis generally define OPEC's imposed production cuts.…”

Section: A Review Of Related Studiesmentioning

confidence: 99%

Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

Ibrahim¹,

Omoteso²

2022

IJGEI

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“…The fi rst group consists of three papers. First, Gault et al (1990) intended to simulate the OPEC production quota assignments of June 1989. The paper examined a list of nine variables related to oil and socio-economic factors that may affect the quota distribution.…”

Section: Review Of Literature From Outside the Opec Secretariatmentioning

confidence: 99%

The importance of weighted variables to OPEC's production quota allocation

Al-Osaimy

Yahyai

2003

OPEC Review

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The objective of this paper is to estimate a weighted variables formula that could be used to calculate OPEC quota distribution. Instead of assigning an arbitrary weight to each of the selected variables included in the formula, we estimate weights based on historical data, using regression analysis. Six national characteristics of OPEC Member Countries, related to oil and socio-economic factors, are considered in the estimation. Time-series are used from 1982 to 2001, for each OPEC Member Country. The results show that the estimated weights are sensitive to the periods considered in the analysis, as well as the number of variables selected. However, there is no specifi c optimum way of dealing with the sensitive, complex quota issue.

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OPEC production quotas and their application to non-OPEC countries

Cited by 5 publications

References 0 publications

Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis

The importance of weighted variables to OPEC's production quota allocation

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