Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book deals with the policy plans, options, and perceptions of the oil exporters in terms of their policies toward the production, export, and price of crude, their ventures into hydrocarbon-processing industries. It is devoted to the study of the developments in the "downstream" oil market: refining, tanker transportation, and petrochemicals. Superimposed upon the general problem of excess capacity in oil-processing facilities is the large-scale construction of downstream operations within the Organization of Petroleum Exporting Countries (OPEC) nations. Most downstream construction within OPEC nations was designed to satisfy indigenous demand. By 1980/1981, nearly a decade of massive infrastructure investments in some OPEC countries had substantially reduced the capital cost differentials to perhaps around 30 to 40 percent. Apart from economic motives, a host of political and social factors that affect the stability of the regimes within OPEC needs to be taken into account.