A few weeks ago,and thirty five years after the Arab oil embargo, the leaders of OPEC met in Vienna and decided to enact an effective production cut of half a million barrels a day (mbd), reducing overall OPEC supply to 28.8 mbd. This cut, a deliberate effort to prop up prices despite the worsening global economic crisis, was quite in character for the oil cartel. OPEC produces today about as much oil as it did thirty years ago despite its ownership of 78 percent of global proven reserves of conventional crude oil and even though the global economy and non-OPEC production have doubled over the same period. And this OPEC domina-tion of more than three-quarters of the world’s crude is more than matched by oil’s
monopoly of over 95 percent of the world’s transportation fuel.
This meager OPEC production level is more stunning in light of the fact that
in 2007, the cartel expanded its member roster to include Ecuador and Angola,
which together produce about as much oil as Norway.