Cheating behaviour among OPEC member-states and oil price fairness and stability: an empirical analysis
Journal article
Authors | Ibrahim, Masud and Omoteso, Kamil |
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Abstract | Within the context of a target oil price band regime, this paper posits that cheating behaviour in OPEC has ethical and accountability implications for the organisation. It also impacts on its reputation and ability to ensure stable and fair oil prices in the oil markets. Based on datasets covering the period from 2000 to 2012 (i.e. production quota era), analysed using the vector autoregression/vector error correction (VAR-VEC) framework, the study’s results indicate that OPEC cheating, mainly instigated by the amount of spare production capacity available to OPEC members, does not seem to have a significant direct effect on international oil prices. However, the degree of cheating by OPEC member-states might disrupt its ability to maintain surplus capacity enough to reduce price speculation in the oil markets. Should cheating behaviour in OPEC continue unabated, this could jeopardise an effective energy regulatory framework and market transparency. The paper, therefore, recommends a policy action in OPEC to support the redesigning of the existing quota system that is fair and just to its members and capable of controlling any cheating behaviour. |
Keywords | OPEC cartel; Cooperation; Cheating; Fairness and oil price stability |
Year | 2022 |
Journal | International Journal of Global Energy Issues |
Journal citation | 44 (1), pp. 1-33 |
Publisher | Inderscience |
ISSN | 1741-5128 |
Digital Object Identifier (DOI) | https://doi.org/10.1504/IJGEI.2022.120775 |
Web address (URL) | https://www.inderscience.com/info/inarticle.php?artid=120775 |
hdl:10545/626282 | |
Output status | Published |
Publication dates | 03 Feb 2022 |
Publication process dates | |
Deposited | 16 Feb 2022, 15:28 |
Accepted | 04 Dec 2020 |
Rights | Attribution-NoDerivatives 4.0 International |
Contributors | Coventry University and University of Derby |
File | File Access Level Restricted |
File | File Access Level Restricted |
File | License All rights reserved File Access Level Open |
https://repository.derby.ac.uk/item/93383/cheating-behaviour-among-opec-member-states-and-oil-price-fairness-and-stability-an-empirical-analysis
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