Answer:
Step-by-step explanation:
The series of oil price increases in 1973–74 marked a distinct era for the oil market because it coincided with the transfer of property rights to the host countries from the major oil companies that had operated the industry in an integrated framework up to that time. Until 1973, the price of crude oil was determined by the major oil companies in an oligopolistic market arrangement, under which a “posted price” was established, with royalties and taxes paid to host governments on the basis of this price. In June 1968, OPEC had published a Declaratory Statement of Petroleum Policy in Member Countries (Resolution XVI.90) in which members resolved to work toward greater control over their resources and increased share of their petroleum assets. Although this event was largely dismissed at the time as another ineffectual move by OPEC to wrest control from the international oil companies, analysts were later to acknowledge the importance of the Declaration. Griffin and Teece (1982, p. 7) wrote that “. . . though this doctrine was not taken seriously at the time, the events of the early 1970s prove it was an accurate blueprint for events to come.”