Hm? Can You name a decent country WITHOUT oil production capacities?
It's high time I said hm... really you just keep amazing me
, either you pretend that you've got all these questions and remarks or...i would better be silent in order to not get you even more freaked out..
I can name you countries without oil production but did it really matter... Ok, just shortly. I was talking about the oil market in general and ALL its participants that are NOT so many actually. Everything is relative and comparable and if you look at contrary markets like monopolistic competition (restaurants, brand marks) or pure competition (like stock market or commodity) you will easily see that the latter has infinite number of suppliers while the fist one is characterized with many of them. And it's logical partially due to heterogeneous products, existence of many substitutes and differentiation in the case of the first one and to fully elastic demand of the latter. Just imagine, as an example, we both are in one market, producing whatever that falls under these requirements, and I chose focus - cost leadership strategy ( which means that I try my best to reduce costs by standardizing my product which in its turn leads to huge economies of scale and to my peculiar market leader position, that's my strength) but you at the same time can gain competitive advantage by trying to find your niche market, that will lead to definitely higher costs but to customer loyalty at the same time, and certainly to higher prices for your product. You can afford to raise your price under these circumstances because people would pay extra for your brand name. These markets are the place of price wars (remember Pepsi vs Cola, franchisers like McDonald's vs Burger King, by the way these companies always follow each other, if Cola wants to penetrate a new market, Pepsi will definitely go after Cola. The same thing is with franchisers' shops' locations, always close to each other. ) There're lots of variants, I've just touched only some of course.
Now, look at oil market, you think all these things are possible in the industrial market where there're REALLY few number of suppliers (we can count them), where product is homogeneous (come on, it's impossible to create the augmented product out of oil, it's just a core one.) And believe you or not, this type of market is characterized by avoided price competition because you just have to follow the market leader otherwise you'll be kicked out of the market. Demand for oil is highly inelastic, there're not yet any substitutes for it.
By the way, restricted entry barriers DO NOT mean that they're authorised or something like that, they just mean that it's very difficult to get into the market due to its conditions, I suppose it's obvious, why. So your example with Iraq is a good one, but NOT valid in this case.
About your comparison of OPEC, I agree, and I would say that actually Saudi Arabia plays the role of more or less the last resort with its perfect facilities to control oil supplies.
With regard to your web page, don't worry I've read it.
It provides with basic known facts among which there's info about the price volitation and development, I don't think we were discussing that matter, as far as I can see it we were talking about the SHOT situation on the oil market and specifically about the comments of OPEC's representative that he said in public. I mentioned it, you asked how it was possible, I tried to show the idea behind, at least the way I could. And I shouldn't have added IMXO, because it's just BASIC MARKETING PRINCIPLES rather than my humble opinion. And if you're unaware of something it doesn't mean that these matters do not exist.
By the way, I've never intented to poke my nose into your affairs, if you've got that impression, I beg your pardon.
