were experienced by American oil companies. This implied strong cooperation between supposedly victimized domestic oil companies and their home na tions, and the OPEC nations which after the oil embargo of the early 1970s nationalized production in a number of instances: "It would seem that OPEC and the companies would be impla cable enemies . . . But the private cartel remained in firm control of most of the world's transport, mar keting, and refining capacity" (Mirow & Maurer, 1982, p. 92).
However much the OPEC nations raised their prices, they would still require ordinary market outlets; such outlets were effectively controlled by the American oil companies:
During late 1973 and early 1974, the Seven Sisters [the seven largest American oil companies of the time] in effect administered the embargo for the Arabs . . . repeatedly referred to the shortage of oil . . . although statistics show that in 1973 OPEC oil production in fact expanded, and at a rate slightly higher than the stable growth rates that had prevailed in the past. The companies made record profits in 1973, with Exxon's profit of $2.5 billion the highest for any corporation in history--news that greatly spurred public outrage directed at the companies in the United States and Europe, where it was widely suspected that the so-called shortage was a sham (Mirow & Maurer, 1982, pp. 92-3).
There was also a decisive industrial scale of post-crisis manipulation of oil supplies, when "partly as a result of the oil price increases, demand for oil began to drop" (Mirow & Maurer, 1982, p. 93). The industry/OPEC response was to cut back production and thus make "huge profits by making sure production did not outstrip demand . . . The two cartels needed each other" (Mirow & Maurer, 1982, p. 94).
Close cooperation between oil producers in the "field" was matched by close cooperation in the financial markets. Mergers and acquisitions, for the oil industry, tend to limit...