ABSTRACT
The economic landscape or market structure has been fashioned by antitrust philosophy that its result is considered to represent the industry's and trade's natural habitat. The central factor in the oil industry's life is its being investment oriented, hence the extreme relationship of fixed and variable cost. The inevitable happened and it was the governments of the main producing countries that took it upon themselves to handle their oil affairs by way of wholly owned national, government-run, oil companies. The traditional large-scale companies that operate internationally occupy center stage, but their modus operandi has fundamentally changed. The essential new element, as far as the international companies are concerned, consists of the fact that their downstream establishment is no longer intrinsically linked to a substantial upstream position of their own. Although in some producer countries the major oil companies have retained vestiges of their erstwhile positions, even "equity oil" is now in fact bought by those entitled to it.
