Relevant Terms

Hi again everyone!

I just wanted to go over a couple of terms that are super relevant to our topics. Keeps these concepts in your mind and use them as a basis of your research as some items to branch off of as they are super important to OPEC! BMUN is coming up and we can't wait to meet you all and hear how knowledgable your ideas are. :-)

WTI- West Texas Intermediate is one of three benchmark crudes that is used in order to determine what price oil should be set at. It is considered "light and sweet," which contrasts other benchmark crudes and allows for some diversity in reference prices.
Brent- Brent crude is another one of the three benchmark crudes mentioned previously.  It is included in the OPEC reference basket and is a mixture of oil from multiple locations in the North Sea.
Cartel Model- Cartel model is based off of a theory that defines what a cartel is. On a basic level, a cartel is thought of to be a union of producers that work together to manage and control prices and production in order to maintain control over the market and thus maximize their profits.  OPEC has been analyzed as a cartel in the past, but disagrees with this analysis.  Another example referenced in the synopsis is De Beers diamond company.
Peak Oil- The idea that global production of oil will one day "max out" and eventually slowly taper off. The main point is that oil will not always be produced in the same massive quantities that it is today.

Peak Demand- The idea that the world will not always have increasing demand for oil. OPEC now recognizes that there will likely be a "peak demand" for oil reached and it will level off past this point. This idea is important to consider, especially in Topic 2 as it is relevant to how OPEC should consider moving forward.

Proven Reserves- The reserves of crude oil that have been discovered and scientifically determined as recoverable in the next few years.

1973 Oil Crisis- While this topic is thoroughly addressed in the topic synopsis, it is important to remember because of its impact on OPEC. This "crisis" was actually a victory for OPEC because it proved that they had power to influence oil prices.