Something I Don't Remember

First, changes in oligopoly form trigger perfect competition. Although oil industry had been monopoly by OPEC which has more than 70% of world oil reserve and more than 40% of world oil supply, vertically integrated companies, called super-majors that perform exploration, development, refinery, and sales, affect oil prices. These super-majors disturb price control by OPEC because when OPEC raises oil price, super-majors raise oil supply. Some counties of OPEC started to sell oil more than the amount that OPEC set the production quota. OPEC used to control oil prices between $20 and $28 per barrel after forming in the 1960 by holding meetings among OPEC countries. However, vertically integrated companies, whose number of companies was reduced from 24 in 1979 to 12 in 1999 by merging with each other, became powerful. In the 1980, super-majors and countries other than OPEC increased oil stock within the countries, oil prices decreased to $15 per barrel. Oil prices again decreased to $10 per barrel because Asia crises reduced oil consumption and Iraq, one of OPEC members, and super-majors increased oil supply. As OPEC could disband and China and Russia could enter to compete for oil market share, oil industry could become perfect competition. Any firm cannot influence the prices of products; perfect competition determines market prices. This perfect completion is likely price competition. Oil industry tends to be price competition because oil became commodity that fundamentally leads to price competition. Oil companies face difficulty in differentiating their products from others as its products are commodity. As industry has been developed, energy use has relied primarily on fossil fuel. As a result, heat, transportation, and electric generation for business and individual have demanded oil supply. Oil became commodity, which usually brings about price competition. BP tends to involve in price competition unless it is kept from perfect competition. Similarly, market