A casual look at the index of the Journal o f Economic Literature or the table of contents of the major economic journals will give a preliminary impression that much theory has been written on the oil market. However, this impression is misleading. The majority of these articles deal with issues of optimal use of limited stocks of natural resources, not, except incidentally, with problems of market imperfec tion. Although this literature is very interesting, we will not review it, except for some articles needed as background for our study. We will concentrate on the papers that discuss market structure.