World Oil Market

The structure of the world oil market in the 1980s is briefly examined. The oil market is characterized by asymmetry with a small number of oil exporting countries and a considerably larger number of oil importing countries. This asymmetry makes synchronization between supply and demand difficult. The result is that periods of scarcity and glut alternate and there are therefore opportunities for both increases and decreases in the real price of oil. The behaviour of the world oil market is analysed within the framework of conventional market, cyclical and dynamic structural theory. The consensus is that a major increase in the price of oil can be expected before the end of the current decade.