The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

If OPEC was not going to cut price in order to defend its production level, then it would have to cut production levels in order to defend price. In March 1982 OPEC, which had produced 31 million barrels per day in 1979, just three years earlier, set an output limit for the group of 18 million barrels per day, with individual quotas for each country, except for Saudi Arabia, which would adjust its production to support the system. OPEC had finally done what it had talked about doing at various times in its history. It had taken on the part played in earlier years by the Texas Railroad Commission in managing production to try to preserve price. In the blunt words of one of the leading analysts from the oil-exporting world, it had turned itself into a cartel, managing and allocating production, as well as setting a price.