Over the last 30 years, the Organization of Petroleum Exporting Countries (OPEC) has had varied success in forming and maintaining acartel agreement among members. What are the main characteristics of a cartel?

Next, explain carefully how the following factorsmay contribute to the difficulty in forming and/or maintaining its price and output agreements.

a) New Oil fields are discovered and increased drilling is undertaken in the Gulf of Mexico and the North Sea my nonmembers of OPEC. b) Crude oil is a product that is differentiated by sulfur content: it costs less to refine low-sulfur crude oil into gasoline. Different OPEC countries possess reserves of different sulfur content. c) Cars powered by hydrogen are developed.