EGEE 120
Oil: International Evolution

Lesson 10 Readings

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Reading Assignments for Lesson 10

Students are to read Chapters 31 through 34 of the text, The Prize.

Chapter 31 - OPEC Imperium
Sections to Read
  • Introduction
  • Oil and the World Economy
  • The Saudis Versus the Shah
  • Yamani
  • Venezuela: The Kitty Cat Died
  • Saudi Arabia: The Concessions Surrendered
Major Themes to Ponder as You Read
  • 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 Adjustment
Sections to Read
  • Introduction
  • Nations Respond
  • "Obscene Profits"
  • New Supplies: Alaska and Mexico
  • The North Sea: The biggest Play of All
Major Themes to Ponder as You Read
  • A reversal of roles, developed vs. OPEC.
  • A huge structural adjustment.
  • Alternative fuels and other sources for oil.
  • Conservation.
  • Economic growth & democracy.
  • Policy changes.

Chapter 33 - The Second Shock: The Great Panic
Sections to Read
  • Introduction
  • "Doing the 40-40"
  • Panic Begins
  • Force Majeure
  • Leapfrog and Scramble
  • "The Worst Times"
  • "The World Crisis"
Major Themes to Ponder as You Read
  • 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
  • Introduction
  • "Death to America"
  • The Second Battle of Qadisiyah: Iraq versus Iran
Major Themes to Ponder as You Read
  • 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.
The Quest
No sections to Read