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Oil Companies: Do Oil Companies Get Big Bucks While the Rest of Us Pay $3 a Gallon - Research Paper Example

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The author of the paper states that a combination of energy efficiency, conservation, and renewable energy alternative will be essential to support and help humanity to move to a post-oil era. This is to reduce the over-dependency of the globe on oil. …
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Oil Companies: Do Oil Companies Get Big Bucks While the Rest of Us Pay $3 a Gallon
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Download file to see previous pages All countries are consumers of oil products, “but only a small set of nations are major producers of oil” (Inkpen and Moffett 6). Since the establishment of the oil industry, consumers and producers have feared that the oil will eventually run out one day. Discovering new oil reserves has been the main venture in the oil industry, because, without new reserves to replace the existing ones, the industry would die. “However, measuring and valuing reserves is a scientific and business challenge because reserves can only be measured if they have value in the marketplace” ( Inkpen and Moffett 5).

Oil plays a very important role in the entire global economy. The International Energy Agency predicts that the energy demand will grow by an average of 1.5% each year through 2030. Over decades the large developed economies have become major importers of oil, giving rise to challenging geopolitical issues involving producers and consumers of oil products. As a result, there is an organization that came in, to bring about equilibrium between the producers and consumers. OPEC, that is the Organization of Petroleum Exporting Countries.

The Organization of Petroleum Exporting Countries was founded in 1960. The founders of this organization were oil-producing countries such as Iraq, Kuwait, Iran, Saudi Arabia, and Venezuela. It is comprised of twelve member countries. Angola was the last country to join in 2006, and there is speculation that Sudan will be next. Its main objective is shifting bargaining power to the producing countries, and away from the large oil companies. This was to secure the producing countries from the exploitation of those large oil companies (Inkpen and Moffett 7). The following are some of the roles played by the organization:

Though the organization has tried in the implementation of these roles, it has faced many challenges like disciplining the members, which has been a major problem. These challenges are the reasons for the oil industry not doing well as expected.   ...Download file to see next pagesRead More
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