The Choice Logic Of Opec Production Policy In The Reverse Oil Crisis

The reverse oil shock refers to the crisis which international oil prices slumps in the short-term and remain at low level for a period of time.The crisis has a great impact on the economy of oil-exporting countries where oil-export is the main source of fiscal revenue.Reverse oil crisis caused by several critical factors including supply,demand,financial market factors,geopolitics,of which the supply and demand are fundamental factors.There are different reasons among reverse oil crises in different periods.The reverse oil crises can be distinguished from the reverse crisis which is dominated by insufficient demand to the reverse crisis which is dominated by oversupply.OPEC plays an important role in the international oil system.The objectives of the conntemporary OPEC organization include two points:reasonable oil prices and market share.Regulating oil production is a policy that normally adopted by OPEC in the modern oil market to achieve organizational goals.Because of differences in resource endowment,domestic and external political-economic environment,OPEC members are complex in preference,which divid OPEC into two blocks,namely moderate countries and radicals countries.The competition between the two blocks determines OPEC's oil production policy choice.The distribution of power in OPEC is imbalance,the moderate countries especially Saudi Arabia,take the core position in OPEC for the dominance since these countries have the advantages in resource endowment,the domestic and external political-economic environment,they can dominate the decision about production policy.The reason of the two reverse oil crises occurred in 2008-2009 and 2014-2016 were the lacking of demand and oversupply,OPEC took different production policies in the two reverse crises with similar declines because the main factors in the two cases are different.It is noteworthy that geopolitical factors play an increasingly important role in deciding on oil production policy formulation.The main body of this paper is divided into four parts.The first part mainly studies the causes of the oil crisis,the organizational goals of OPEC,the differences within the policy orientations of member countries.The second part examines the reasons for the outbreak of two reverse oil crises in 2008-2009 and 2014-2016,OPEC's oil production policy,and the competition among member states.The third part explores the focus of OPEC's power distribution,the focus of the member states which take the power of OPEC in developping production policies,and the influences of geopolitical factors for the OPEC policy by comparing the two different reverse oil crises,while discussing OPEC production policy may achieve the effect.