The Impact of Shale Resources on Convergence and Divergence in OPEC and Oil Producers

Since the formation of OPEC in 1960, political disagreements between the members of the organization have prevented convergence in order to achieve the objectives of this economical organization. Apart from the rise in oil prices in 1973 due to the political issues among the members, the influence of the politics prevents consensus between the members to achieve the economic objectives. But since mid-2014, the large influx of oil and gas shale in the US market (the world's largest energy consumer) caused a big fall in oil prices while some of the major manufacturers of OPEC were trying to control the production from the shale resources and market regulation by implementing independent policies. Implementing divergent policies under the influence of intense political competition between the members also made more reduction in oil prices. Forces of producing shale oil and gas in the global oil market caused the members to stable the fluctuations and then raise the price to some extent by convergence and consensus on reducing production despite their great political disagreements. This article is discussing how an economic cartel that sacrifice the economic interests of its member for their political goals, can pass political obstacles and concentrate on their economic interests.