The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted. Too low and players start losing money, too high and people switch away from oil, too much volatility, and people switch away from oil.
Only the non-competitive ones. That's how competition works.
OPEC would be deemed an illegal anti-consumer price fixing scheme under the laws of any country with even the most basic of anti-trust laws, if not for the fact that its entirely composed of sovereign countries not subject to any law but their own.
If the price is too low and fields stop being exploited because they're unprofitable, you reduce the volume produced each day. That means there's scarcity with a low price, and you're back at trying to switch en energy source because you just can't get oil.
That moves prices upward, because people are willing to pay more, but increasing production is not like turning the faucet in your home. It takes time. This is the instability of oil production that OPEC tries to prevent, to keep the world hooked on readily available just cheap enough oil.
In a free market "scarcity with a low price" is a contradiction. If there's scarcity the prices will be high, not low. And nobody's going to be reducing production if the prices are high.
> instability of oil production that OPEC tries to prevent
First of all, if the goal is to prevent instability OPEC is doing a terrible job. Secondly, a cartel is not needed to prevent price instability, as demonstrated by the hundreds of other commodity markets around the world which are not controlled by cartels engaging in price fixing schemes.
As with any cartel, the purpose of OPEC is to maximize profits for its members, artificially fixing the price of oil at a level higher than what it would otherwise be in a free market not controlled by a cartel. Price stability is a side effect of that, not the goal.
> First of all, if the goal is to prevent instability OPEC is doing a terrible job.
I mentioned this upthread, the instability OPEC is trying to prevent is civil unrest from not being able to fund their social programs and governments. They need a price that puts them in the black and the rest of the world will pay. If it was a free market the fracking boom would still be raging and oil would be $30/bbl. Many gulf nations would fall apart if oil was at that price for a long period of time hence the price manipulation. (I'm not sure how they got the frackers to ease up, some say many of the frackers were bought out by OPEC members and their wells capped but that's just conspiracy afaik)
> The goal of the cartel was to stabilize prices right in the sweet spot to keep the world addicted.
If the price of oil remains low the gulf governments can't fund their social programs and risk instability. That may not be the only reason for OPEC but it's a major one.
When fracking really took off the writing was on the wall and I think many OPEC nations have since taken serious measures to shield themselves from price drops. This is probably why the UAE can now feasibly leave OPEC. I thought the fracking boom was the end of OPEC but they managed to hang on.
The prices would go down too much, and then infrastructure would rot as production slows down. Then, prices would skyrocket, and so on.
Oil production and distribution is basically infrastructure, like energy or internet. It can't really follow free market dynamics without eating itself.
A healthy cartel means consistent oil prices. Without it, oil may average cheaper over the long term (and almost certainly over the short term), but there will be a lot more variance.
My understanding is basically that OPEC is similar to a workers union. Countries band together and set terms that dictate the price and the supply available in the market.
UAE leaving OPEC is like breaking up a workers union. UAE is no longer required to restrict how much oil it exports, and also doesn't have to set a price floor. They're allowed to sell more oil cheaper, potentially at the expense of neighboring OPEC countries.
Which to me sounds like a good thing for the rest of the world?
Ordinarily a Cartel is illegal. If say the US breakfast cereal manufacturers decided to all agree they'll charge a minimum $20 per kilogram, no bulk discounts, the government can and likely will (assuming they don't remember to bribe Donald Trump) prosecute them and force them to stop doing that.
If you've been involved in an SDO ("Standards Development Organisation" think ISO or the IETF although the IETF would insist that they are not in fact an "Organisation" they will admit to being in effect an SDO) you've probably at least glanced at documents explaining that you absolutely must not do anything which looks like Cartel activity, you can't use the SDO to agree prices, or to cut up territory or similar things. The SDO's lawyers will have insisted they make sure every participant knows about this because they don't want to end up in prison or worse.
However the trick for OPEC is that it's a cartel of sovereign entities. It can't be against the rules because its members are the ones who decide the rules. So Chevron and Shell and so on cannot be members of OPEC but the UAE and Venezuela can.
> Which to me sounds like a good thing for the rest of the world?
It probably isn't a bad thing, but let's not overestimate the beneficial effects. The reason oil prices are high right now isn't because of cartel fuckery, it's because of Trump and his war. And oil supply chains are in such chaos because of Trump's war that even if it ended tomorrow it would take markets multiple years to return to a pre-war state.
The bottom line is that oil prices are going to be elevated for years to come, and when oil prices are high, OPEC has nothing to do other than sit back and collect the profits. And thanks to the ongoing solar revolution, oil's days as the world's predominant geopolitical poker chip are numbered; by mid-century OPEC won't be relevant anyway.
By mid century, worldwide fossil fuel usage will be higher than it is today. Solar will take over some of the electricity production including transportation but in the overall energy mix it will largely be a supplement, not a replacement. Total per capita energy use from all sources will continue to increase at a rapid rate.
> By mid century, worldwide fossil fuel usage will be higher than it is today.
Even if this turns out to be true, it would be irrelevant. The reason that oil occupies the geopolitical role it does today is because of its potential to rapidly bring the entire developed world to a halt. Oil will always be in demand because of its many useful applications (and this demand may even grow in absolute terms despite declining per-capita consumption, because the global human population is projected to continue increasing well into the latter half of the century), but as an energy source, by 2050 it will have so many highly-available complements that an oil cartel will be as relevant as a potato cartel.
How many married people met on fb? Estranged family members reunited, long lost friends who found each other again? Etc.
It's impossible to know the number for those, but I vividly remember how difficult it was to find people before fb. And they made it trivial because of critical mass.
I'll acknowledge that this has also led to a lot of unwanted "finding" too. Again, we cannot calculate. But it's worth bringing up proportionality. Because you could make the same argument about a mass retailer like Walmart. They sell tires that were used in drunk driving crashes, they sold food eaten by obese people, they sold cigarettes (at least thru the 90s) to lung cancer victims, etc. You can skew the data however you like because they sold items to so many customers. But they also fed a lot of families and reduced the cost of living (sometimes by nefarious means) for a lot of poor people.
The evil lies in the feed. All the standard addiction techniques are present. All the engineering to promote "engagement" is actually basically addiction. And the attempts to show you want you want have a strong tendency to show you more extreme versions of anything you previously watched. It's very, very easy for it to lead you down a rabbit hole into extremist territory. It's inherent in any such prediction algorithm unless somehow the selector understands to bias away from extremism.
Meta isn’t as blatant about it, but they’re arguably much worse than anything else listed here. I think because it has legitimate uses up front, like keeping up with your friends or selling something on the marketplace, and the true evil is just below that veneer. Gambling and payday lending is right out front.
Rockets, satellites, social media, AI - the only thing missing from the SpaceX hype portfolio is a certain coworking company. That would really set them up for an exciting IPO.
IMO it’s also a distraction to blame it on “capitalism” or some “larger trend” rather than just pointing directly at the company and people responsible.
“The system is broken” line hasn’t worked for years now. Maybe if we stop blaming the system and start blaming the people?
The Koch brothers stopped breaking the law because it was too expensive. Instead they started lobbying to get the laws changed. This is where the idea that the system is rotten comes from.
Saying "corporations have lied in the past for their own self interest" and then pointing to two very well known examples does not imply or over generalize that all corporations do that.
The point isn't to demonize all corporations, it's to say specifically that a pathology of some megacorporations is broadscale lying to the public about the safety of their products for personal gain.
I would actually be impressed with the administration if they strategically decided to use aliens as a PR move specifically to distract from the topics listed.
IMO the “why” is far simpler, not a complicated ploy to distract people’s attention.
it's not complicated they're just flailing around, why do you think we're in a completely ineffective war with iran that has opposed pretty much all strategic advice
if the press is leaning towards a bad story, they release some other thing... they've been doing it all year
this like is saying email marketing is done better if you hand write every email. Thats true, but the hit rate is so low, that you are better off generating 1 million hyper personalized emails and firing them off into the ether
As someone who did the former for a couple years, “better off” is subjective and dependent on your business model, particularly for B2B. It’s a trade off like anything else. You may get more leads, but they may convert at a lower rate. Sending at that scale also increases your risk of email deliverability problems. Trashing your domain has more impacts than you’d think. In smaller, targeted markets it even can damage your business reputation and hurt future sales if done poorly; word gets around.
I disagree. Many humans are phishing in a different language than their native tongue, and LLMs are way better at sounding legit/professional than many of them. The best spear-phishing will still be humans, but AI definitely raises the bar.
If it's true that Musk is getting rules changes so that SpaceX can be included in the S&P earlier than the current rules allow, I think there's a non-zero chance of Musk falling even more out of favor than he currently is, if not worse (if the SpaceX IPO ends up losing people money in the first 1-2 years)
The hype train will ensure the SpaceX IPO is successful beyond the 2nd year mark. Musk keeps making these moves because he knows, he doesn’t want it catching up to him. Better to offload the risk to Wall Street.
No one does SEO because they're trying to help Google.
You do it because you're trying to help the people using google. (Edit: or trying to make money by driving traffic for ads)
Whether or not companies spend time on AEO is directly tied to whether LLM/agents/AI/etc end up becoming a lead channel that buyers use to research products to buy.
Why/how?
Without a healthy cartel, wouldn't prices go down? Cheaper oil means less adoption of alternate energy sources.
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