The Triumph of OPEC

For nearly half-a-century, the organization has been a cartel in name only. Now it may be the real deal.

For much of its 47-year existence, the Organization of the Petroleum Exporting Countries (OPEC) has been a cartel in name only. It could not, in practice, control oil prices because many of its members regularly breached the production quotas that were intended to regulate the market. So OPEC generally followed oil prices up and down, as supply and demand conditions shifted. But now OPEC may be the real deal: a cartel that works. If so, that’s bad news for us.


Look no further than last week’s OPEC meeting in Vienna. Oil ministers declined to increase production despite a fairly obvious case for doing so. Not only were oil prices fluttering just above $100 a barrel, but the United States is either in or near a reces