ABSTRACT
In spite of the substantial changes in the conditions of supply consequent upon the rapid development of large low-cost reserves after the end of the Second World War, the rate of production of crude oil was, until the later 1950s, surprisingly closely adjusted to the rate at which it could be processed and sold as products without ‘disorderly’ effects on prices. As we shall see in the next chapter, this does not mean that the increasing availability of low-cost oil or the various short-term disturbances had no effect on world prices, but the effects were controlled, and few changes were forced on the firms in the industry by competition until the end of the 1950s. Partly for this reason the industry has frequently been described as a cartel, but its development in the period was in fact shaped by a very unstable combination of individualist competitive enterprise and co-ordinated planning.
