OPEC

OPEC and Political Instability - The majority of current oil reserves are controlled by a handful of politically unstable countries, especially those in the international energy oligopoly, OPEC. OPEC's control over the market allows it to control how much oil enters the market, and the fact that the majority of OPEC countries constantly contend with terrorism adds an added element of unpredictability to the international oil price mechanism. Oil companies have a major incentive to explore in order to diversify their reserve holdings and hedge against unforeseen issues in any one unstable part of the world. Furthermore, there is a growing focus by governments around the world on achieving energy independence by helping non-OPEC corporations find new reserves through investment in new technology. This manifests itself in a number of ways, from tax cuts and subsidies to the loosening of environmental regulations.