ABSTRACT
The world price of oil, ever since the emergence of a world oil market, has been set mainly by economic factors. The policies of major oil-importing countries obviously have a considerable effect on price and availability of oil on the world market. Europe and Japan had nearly completed their conversion from coal—and of course customers cannot shift to oil for more than 100 percent of their energy needs any more than companies can write off more than 100 percent of their taxes. Economic and political circumstances in the early 1970s interacted to put an end to this exceptional period of falling global energy prices and to prepare the way for the dramatic shift from company oligopoly to government cartel. In Organization of Petroleum Exporting Countries (OPEC) countries, the companies would continue to act as production managers; abroad, their established networks of refineries and sales organizations would help to enforce OPEC's production and pricing decisions.
