Theoretical Elements for an Introduction to Petroleum Economics

Abstract

Within the last few years, far-reaching changes have occurred in the international oil industry. Many explanations of those changes were given in newspapers and oil magazines but most of them were either wrong or partial. The weakness of many analyses can be partly explained by the lack of a conceptual framework which enables us to study accurately the oil industry. Indeed, we must confess that the greatest part of the literature dealing with this subject is purely descriptive and rarely theoretical.¹ In this article we would like to propose some theoretical concepts and a new methodological approach. This could aid a more precise study of the oil business² and, perhaps other industries later on.