The Changing Relationship Between OPEC Countries and International Oil Companies: The Dynamics of Bargaining Power in an Evolving Market

The formation of OPEC in 1960 marked the beginning of a new era in the structure of the oil market and in the relationship between host governments and International Oil Companies (IOCs).

In subsequent decades, the relationship has known many transformations as market conditions continued to evolve.

The chapter, written by Dr Carole Nakhle, CEO of Crystol Energy, and Francesco Petrini, is part of the Handbook of OPEC and the Global Energy Order: Past, Present and Future Challenges published by Routledge. It analyses the evolution of the relationship between OPEC and the IOCs, between 1960 and 2018, with a special focus on market power and the fiscal and contractual changes that have accompanied that evolution. The chapter also investigates the domestic and global factors that have triggered major changes in that relationship and in the bargaining power of the respective parties, and how these are likely to evolve in the light of growing competitive forces and challenges shaping global energy markets.

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