Interpreting Changes in the Petroleum Regime
The hegemonic stability model leads us to expect a change in international petroleum arrangements during the mid The dominance of the United States and other industrialized countries was increasingly being undermined, as OPEC members gained potential power resources at their expense. What the Yom Kippur War did was to make the Arab members of OPEC willing to take greater risks. When their actions succeeded in quadrupling the price of oil almost overnight, mutual confidence rose that members of the cartel who cut back production would not be "double-crossed" by other producers, but would rather benefit from the externalities(high prices as a result of supply shortages) created by others' similar actions. Calculations about externalities became positive and risks fell. A self-rein-forcing cycle of underlying resource strength leading to success, to increased incentives to cooperate, and to greater strength was launched.