The shift in global crude oil market structure: A model-based analysis of the period 2013–2017

Berk, İstemi; Çam, Eren

doi:10.1016/j.enpol.2020.111497

Cited by 12 publications

(6 citation statements)

References 53 publications

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“…In 2017, OPEC countries including Saudi Arabia and Russia began programs to restrict production (OPEC 2017). Higher competition in the market, however, drove them to restrict production less than they would if they had total oligopolistic power (Berk 2020). This would suggest the market is not entirely a collusive oligopoly.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

Vasquez,

Carpenter,

Blessing

2024

MSJ

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This paper examines the recent movements to transition away from oil in the Gulf Cooperation Council immediately following the oil price crash of 2014. To provide a useful frame of analysis, we examine the oil production of state-owned firms in Saudi Arabia, Kuwait, and Oman through the lens of the microeconomic shutdown rule. This reveals that these states have entered a phase where they wish to exit the market in the long run, but maintain operations in the short run, as operations still yield an immediate accounting profit. We find that the drive to transition was created by a fall in average oil price to around USD $50 a barrel. We also find that this process is significantly hampered by the strong presence of the so-called ‘authoritarian bargain’ in these countries, whereby governments reduce austerity measures and taxation in order to maintain popularity. As the world lessens its reliance on fossil fuels, we examine the dilemma faced by oil dependent states: they must choose to either lose political capital in an attempt to become economically sustainable or risk the oil rents that sustain their regimes drying up.

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Section: Conceptual Frameworkmentioning

confidence: 99%

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

Vasquez,

Carpenter,

Blessing

2024

MSJ

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“…OPEC's pricing power has come under extreme scrutiny in the oil literature (Smith, 2005; Almoguera et al ., 2011; Fattouh and Mahadeva, 2013; Golombek et al ., 2018; Berk and Çam, 2020). OPEC's market power stems from its ability to adjust production and manage a spare capacity cushion that can be utilised at any given point in time to offset sudden and abrupt disruptions in either the supply or demand side of the global oil market (Fattouh and Mabro, 2006).…”

Section: The Role Of Opec For Global Oil Market Stabilitymentioning

confidence: 99%

“…Using quarterly data from 1986 to 2016, Golombek et al ., (2018) also find that while OPEC exerts market power, this power tends to vary over time. Berk and Çam (2020) find that oligopolistic market structures fit the market outcomes before 2014, but they fail to explain the low oil prices during 2015 and 2016, which were closer to levels generated by a competitive market, supporting the view that the market has shifted to a more competitive structure.…”

Section: The Role Of Opec For Global Oil Market Stabilitymentioning

confidence: 99%

OPEC at 60: the world with and without OPEC

Economou

Fattouh

2021

OPEC Energy Review

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This paper provides a historical perspective from 1990 to 2018 of the functioning of the world oil market with and without OPEC. The analysis builds on a new methodology simulating counterfactual (i.e. what‐if) outcomes in the rich context of state‐of‐the‐art structural VAR models of the world oil market to empirically assess OPEC's contribution to oil markets and the global economy by quantifying the impact of OPEC's balancing role via its spare capacity cushion on the historical evolution of oil production, oil prices and price volatility, the joint evolution of the supply and demand elasticities and global welfare. A counterfactual scenario is constructed of how global oil production would have evolved if OPEC had been producing at maximum capacity, held no spare capacity and did not play any balancing role since 1990. The analysis also employs a general equilibrium approach to determine the global welfare implications of a world without OPEC spare capacity across oil‐exporting and oil‐importing regions. The welfare effects are calculated based on regional GDP gains and losses following changes in oil production patterns globally. The methodology to determine the impact on GDP is based on a computable general equilibrium (CGE) framework which offers a high level of detail regarding the world economy in terms of economic sectors and regional interdependencies.

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“…It can be characterized by opposing objectives and strategic interactions, in line with the basic features of the game between PCO enterprises and the government 15 .This promotes the widespread application of this method to analyse the strategy choices of different groups in interactive situations 16 . Currently, the application of evolutionary game theory in solving the problem of division of labour and cooperation involves environmental governance 17 – 22 , economic trade 23 – 26 , social and corporate management 27 – 32 and many other aspects. Depending on the size structure of the research subjects, theoretical studies are divided into evolutionary games under mixed homogeneous groups and evolutionary games under spatially structured groups to explore the conditions of cooperation dominance, the mechanisms and influencing factors of cooperation under evolutionary stable states, and then make sensible suggestions for practical problems.…”

Section: Introductionmentioning

confidence: 99%

An evolutionary game study of cockroach control strategies in residential households

Liu

et al. 2023

Sci Rep

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Cockroach control in Beijing's residential households is supported by the local government previously but now it is paid by the residents themselves. Under the new residential household cockroach control strategy, the evolutionary game theory is applied in this study to construct an evolutionary game model for the choice behaviour of both PCO (Pest Control Operation) enterprises and the local governments under government regulation. The evolutionary stabilization strategies under different situations were suggested and the key factors for the evolutionary game behaviour were analyzed through Matlab simulation. It was found that the benefits and costs of the local governments' promotion for the cockroach eradication activities, the incremental benefits of PCO enterprises through government publicity and the subsidies for the activities, and the additional costs of PCO enterprises to participate in cockroach eradication activities are the key factors. The incremental benefits from the publicity of the activities and the government subsidies can be used to incent the PCO enterprises’ activities, which may be failure without the government promotion. This study confirms the decisive role of the strategic choices of PCO enterprises and the government for effective cockroach eradication activities. Therefore, before the campaign is launched, it is necessary to take into account the economic benefits of PCO enterprises and the public interests of the governments so that the game system can evolve out of the "ineffective" and undesirable "locked" state and evolve towards the ideal state, while would be a basis for other anti- pest efforts.

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The shift in global crude oil market structure: A model-based analysis of the period 2013–2017

Abstract: The responsibility for working papers lies solely with the authors. Any views expressed are those of the authors and do not necessarily represent those of the EWI.

Cited by 12 publications

References 53 publications

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

Rentier States and the Transition Away From Oil: Oman, Kuwait, and Saudi Arabia

OPEC at 60: the world with and without OPEC

An evolutionary game study of cockroach control strategies in residential households

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