Reading Assignments for Lesson 10
Students are to read Chapters 31 through 34 of the text, The Prize.
Chapter 31 - OPEC ImperiumSections to Read
- Oil and the World Economy
- The Saudis Versus the Shah
- Venezuela: The Kitty Cat Died
- Saudi Arabia: The Concessions Surrendered
- OPEC's Golden Years.
- The clumsy OPEC cartel.
- The US twin pillars strategy.
- The culture shock from petro-dollar.
- Complete nationalization of oil by producing countries.
Chapter 32 - The AdjustmentSections to Read
- Nations Respond
- "Obscene Profits"
- New Supplies: Alaska and Mexico
- The North Sea: The biggest Play of All
- A reversal of roles, developed vs. OPEC.
- A huge structural adjustment.
- Alternative fuels and other sources for oil.
- Economic growth & democracy.
- Policy changes.
Chapter 33 - The Second Shock: The Great PanicSections to Read
- "Doing the 40-40"
- Panic Begins
- Force Majeure
- Leapfrog and Scramble
- "The Worst Times"
- "The World Crisis"
- Emergence of revolutionary regime in Iran - ushered in state sponsored terrorism funded by oil revenues.
- America once again paralyzed by oil dependency.
- Serious talk of $100 oil.
- The supply shock was seeding its own destruction - expectations vs. reality.
Chapter 34 - "We're Going Down"
Sections to Read
- "Death to America"
- The Second Battle of Qadisiyah: Iraq versus Iran
- Second oil price shock occurred in 1979 after Iranian revolution - set off panic buying.
- Iran-Iraq War in 1980 distorted the oil market into believing in a permanent shortage.
- Inventories are very important.
- Markets adjust and can break quickly as expectations change.