Case 160 - OPEC and the World Oil Market: The March 1983 London Agreement
Kohl, Wilfred L. and Carol W. Rendall
During the early 1980s, the Organization of Petroleum Exporting Countries was beginning to lose control of oil prices. In February 1983 Norway and the British National Oil Corporation announced oil price reductions, which Nigeria said it would match. After 12 days of negotiations in London, OPEC made a historic decision to lower, for the first time, the price of its benchmark light crude from $34 to $29 per barrel. This two-part case study explores coalition behavior and decision-making, showing how the cartel functioned in the oil market of the 1980s under the pressures of declining oil demand and market share.