o enforce monopoly pricing. Such pricing would have led to severe political repercussions and brought on the hostility of political interest groups more powerful than the oil companies themselves. Moreover, while individual companies could not gain market share by cutting prices, they might well lose market share by raising prices. Under these conditions, a sort of balance of power prevailed among the international oil companies, and prices tended to be stable.
B. The Long-Term Trend: Declining Prices
About 1948, the United States ceased to be a net exporter of oil, and the Middle Eastern crude replaced Texas crude as the benchmark price for world oil. However, the long-term price trend for oil over the next two decades was gradually downward. The essential reason for this downward price pressure is that, even as world oil consumption increased over those decades of widening worldwide industrialization, the supply of oil was growing even faster. The ability of the oil companies to "administer" prices and avo
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