ABSTRACT

Role of National Oil Companies in the International Oil Market [August 21, 2007]   [open pdf - 132KB]

From the Summary: "In the United States, the term 'big oil companies' is likely to be taken to mean the major private international oil companies, largely based in Europe or America. However, while some of those companies are indeed among the largest in the world, by many important measures, a majority of the largest oil companies are state-owned, national oil companies. By conventional definitions, national oil companies hold the majority of petroleum reserves and produce the majority of the world's supply of crude oil. Since national oil companies generally hold exclusive rights to exploration and development of petroleum resources within the home country, they also can decide on the degree to which they require participation by private companies in those activities. […] However, if the price of oil moderates, the potential supply constraint related to the inefficient operations of the national oil companies may be a destabilizing factor in the world oil market. A wide variety of policy directions can be taken to mitigate the potential challenge posed by the dominance of national oil companies. Demand management policy can reduce the U.S. dependence on imports. The U.S. government can use its political influence to try to encourage nations not to use national oil companies to forward the aims of the government, but to follow commercial practices to maximize revenue flows. An expanded supply of oil could be encouraged as a condition for trade and aid agreements in some cases. Finally, promoting international trade and recognized commercial practices could be encouraged."

Report Number:
CRS Report for Congress, RL34137
Author:
Publisher:
Date:
2007-08-21
Copyright:
Public Domain
Retrieved From:
Via E-mail
Format:
pdf
Media Type:
application/pdf
URL:
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