REASONS for choosing the studyI was profoundly inspired by the Pulitzer Winner Book “The Price:The Epic Conquest for Oil, Money and Power” by Daniel Yergin which spoke about :In the Fortune 500 ranking published in 2008, six oil organisations were included which demonstrates the role of oil in modern capitalism,politics and worldwide influence.Oil since the beginning of time has been a commodity influencing all parts of the world and has prompted the fall and ascent of countries,governments and societies.It likewise determined the outcome of the two world wars which changed the global economic scenario as well as smaller wars such as the Cold War and the conflict in the Middle East.Oil in this day and age holds nearly the same measure of criticalness as cash.Origin & nature “Seven Sisters” was the term used for the seven multinational oil companies which commanded the global oil scenario from the mid 1940s to the mid 1970s. The business assemble comprised of Anglo Iranian Oil company, Gulf Oil, Royal Dutch Shell, Standard Oil Company of California, Standard Oil company of New Jersey, Texaco and controlled around 85% of the world’s petroleum reserves.In 1922 December Shell – La Rose field blew out with an uncontrolled flow estimated at one hundred thousand barrels per day. Development preceded in 1921 Venezuela produced 1.4 million barrels. By 1929 it was 137 million barrels making it second after the US in production. It became the largest single earning for the Royal Dutch/Shell and it became Britain largest supplier. The uncertainties of the President Gomez’s government and for safety refinery were set in Dutch island off the coast by Shell. Even by Lago(U.S. company Pan America later purchased by Standard). Then with the fall of the Gomez regime in 1943 the Petroleum law was introduced, Prez Alfonzo wanted Venezuela to reap the profit of transportation, refining and marketing. The tax law ensured fifty-fifty division between the Oil Company and government. 1948 the democratic government was thrown into jail on the rise of coup. Prez Alfonzo was allowed to leave the country and in 1958 dictatorship toppled and he returned to take up the post of the Minister of Mines and Hydrocarbons. He wanted to create a system run by government not the oil company which was turn down by America so he seek out towards the east – Cairo (at the Arab oil conference) where he was introduced to Abdullah Tariki the head of the Directorate of Oil and Mining Affair in Saudi Arabia a supporter of Nasser (Egypt) by Wanda Joblonski oil journalist. A secret meet held in Maadi along with Kuwaiti; the Iranian Prez Alfonzo put his idea forward of forming a Oil consultative commission to defend the price structure to protect government revenues a front against the Oil companies- that later developed in to the Organization of Petroleum exporting Countries(OPEC in 1960).OPEC trusts itself to be a force for market stabilisation and not a anti-competitive cartel as it was shaped to balance the dominants of the oil market ” the Seven Sisters”. It’s primary objectives have always been to ensure market stability and safeguarding the revenue of it’s member countries. Despite OPEC being a driving force the non-OPEC countries have had a substantial share in the world market. It has not had any conflicts with the WTO related to competition acts as protected by the organisation’s sovereign immunity.EXISTING SCHOLARY WORK – LITERATURE REVIEWOPEC and World Crude Oil Markets from 1973 to 1994:Cartel,Oligopoly, or Competitive?, A.F. Alhajji and David Heuttner, 2000The study investigates the existence of the world’s dominant producers of crude oil for the period of 1973 to 1994. Contrary to popular beliefs it speaks about how despite OPEC being a major player can not be called the dominant player. It analyses the Saudi Arabia model and the alternative reasons as to why OPEC’s profits unexplainably in the period 1973-1978.Can OPEC Cartel reverse crude oil price downfall, Ibrahim Onour, 2017This paper analyses the sensitivity of crude oil price changes to the change in OPEC’s production of crude oil as well as the non-OPEC countries. It shows how the OPEC’s production capacity no more affects the world’s price changes or have a very minimal impact. It is more impacted by the US supply expansion than the OPEC production of crude oil and it’s supply decisionsOPEC, the Seven Sisters, and oil market dominance : An evolutionary game theory and agent based modeling approach, Aaron Wood, Charles Mason, David Finnoff, 2016The study consists of the struggle between the Seven Sisters i.e. the leading companies in the world market before the entrance of OPEC and their struggle for control over the global oil market. The cartels and their market shares over the years from 1960 to 2016 including their theoretical models. The transition in power due to the learning and growth of the market.Analysis of Saudi Arabia’s behavior within OPEC and the world oil market, Khalid Alkhathlan, Dermot Gately, Muhammed Javid, 2014The study analyses the oil production and export behaviour of OPEC and Saudi Arabia within the OPEC. It depends on the a lot of various conditions but it’s main aim is the stability of OPEC and through this the stability of the world oil market. It reduces it’s exports with OPEC when faced with decreasing demand and increases its exports when faced with problems in OPEC. It proves their consistency with the strategies and plans of the OPEC but also it’s own thinking being used in various other situations for it’s own best interests.OPEC’s oil exporting strategy and macroeconomic (in)stability, Luis Aguiar-Conraria, Yi Wen, 2012The study argued that the dependence on oil from foreign countries increases the economic instability for oil importing countries. The decisions made for prices and quantities of oil by the cartel of oil exported such as OPEC can affect the economic stability. It explains the reversal of market strategies by the OPEC from setting the quantity of production rather the price of oil leading to the decline in economic volatility especially in the importing countries.OPEC’s oil production has been more or less consistent for the period 2010-2017 and fell in some years due to the fall in price of oil globally. The greatest decline was due to Libya over the period and increase was also due to Libya in 2012-13 and Iran and Iraq.The highest producer has been Saudi Arabia making it the decision making influencer. 2010-11: The world demand declined due to the financial crisis but increased overall due to the demand for developing Asian countries such as China.Political issues impacted South Sudan’s production in 2012, with output shut down in January due to gridlocks between South Sudan and Sudan on oil transportation and other issues.2011-12: The world demand increased but not by a huge percentage due to low economic development and Japan’s catastrophic earthquake and tsunami. 2012-13: Optimism in industrial and manufacturing activities, rather high purchaser certainty and empowering vehicle sales statistics have all upheld oil demand growth. 2013-14: The world’s petroleum liquids supply was supported by a tight oil, condensate and NGL output surge from US unconventional sources was higher in 2014.2014-15: The world’s petroleum liquids supply was relatively boosted in 2015, despite the weak oil price, lower investment.2015-16: Cuts in international oil companies’ (IOCs) contrasted with a year earlier relatively reflected crude oil, condensate and natural gas liquids (NGLs) output declines from non-OPEC countries, particularly from the US on- shore lower-48 states, as well as in China, Mexico, Brazil and Colombia. Meanwhile, OPEC crude oil and NGLs output increased.2016-17: Canada shows the greatest supply growth potential.Crude oil output increased mainly in Nigeria, while production mainly declined in Angola, Saudi Arabia, Venezuela and UAE.The share of OPEC crude oil in total global production fell slightly.2010-11: This exceptional increase in the price, even with an uncertain economy, was attributed mainly to the turbulence in the MENA area disrupting exports, mostly in Libya, coupled with a supply deficit from other regions, including the North Sea and West Africa.2011-12 : Despite global economic growth stagnation, the upward movement in prices was supported throughout the year by turmoil in the Middle East and supply disruptions in the North Sea fields.2012-13 : The upward movement was driven by ongoing supply shortages from Libya, weather-related shipping delays, year-end inventory drawdowns and better refined product margins that supported the demand for crude, particularly in Asia.2013-14 : Global production was rising more rapidly than refiners could absorb it. The weak economic data from Europe and China — as well as a strong US dollar, seasonal refinery maintenance and intense speculative liquidation — were also to blame for the oil market’s sluggish performance.2014-15 : global oil markets continued to suffer from a year-and-a-half long persistent oversupply coupled with increasing signs of a slowdown in the Chinese economy. Along with these two factors, a significant price decline in global equity and commodity markets helped to depress oil prices. In addition, oil prices were driven down by financial flows caused by fluctuations in other asset prices, including the US dollar.2015-16 : OPEC and non-OPEC countries made a historical decision to adjust production in order to curb crude oversupply, it still ended the year at its lowest point. This occurred as the saga of the oil market’s supply glut and the weakening of the Chinese economy continued. Moreover, swelling crude and product inventories also continued to pressure the oil complex.Apart from positive market sentiment, arising from the efforts of major producers to trim output and expectations for dwindling US production, support came from healthy physical oil markets, particularly in Asia led to the increase later on.LESSONS LEARNTChallenges facing OPEC are:The cost of non-OPEC crude oil has decreased significantly due to the technological advances in shale oil which has undermined OPEC’s attempts to rebalance the oil market and stabilise the prices. Even after the OPEC members agreed to limit their output, US output has increased to 8 million barrels per day, the highest level since the 1980s. Production is expected to increase in Canada and Brazil as well.Iraq an OPEC member is now producing 3.5 million barrels per day but visions to increase production to 9-10 million barrels per day by 2020. Iran and Iraq’s production boost will still be high for Saudi Arabia offset. This will lead to regional rival disputes as Saudi Arabia may ask them to limit export growth but without substantial incentives it will be very difficult to back.OPEC’s biggest threat in the coming time is the worldwide campaign for renewable energy, and fight against fossil fuels which are considered a main source of greenhouse emissions. Oil is facing competition from natural gas majorly for feedstock for industrial plants and the increasing efficiency of hybrid and electric engines due to rapid technological advancements. Recommendations for FutureAsia is turning into a potential market for OPEC even bigger than Europe and North America combined due to their increasing demands to fund their developing economies. Co-dependence between OPEC and Asian countries, majorly China and India is developing and needs to be strengthened. China is involved in projects in Saudi Arabia, Iraq and Iran and imports about 15% from Angola. India is also Nigeria’s biggest customer. Asia is OPEC’s saving grace to maintain it’s oil prices. In order to maintain this co-dependence it needs to keep oil prices reasonably for Asia to afford as well as for Asia’s economic growth to contribute to increase OPEC’s oil demand and prevent alternatives of renewable energy from becoming more economically feasible.OPEC’s strategy of cutting down production to curtail oil prices may only be beneficial in the short run, and therefore members should be encouraged to diversify into alternative energy sources. Diversification into electric vehicles and aircrafts can prove to be an advantage.Al-Qaeda and other terrorist organisations should not be allowed to associate or take advantage of the oil industry.OPEC needs to focus on other issues than the oil price. The role of foreign private companies, privatisation of projects through joint ventures, reduction in duplication of docking,shipping nd tanker facilities and regional cooperationVenturing into wind and solar source of renewable energy will be more profitable as they are now cheaper than gas,oil and coal in current conditions.