An Anatomy of the Oil Pricing System
The current oil pricing system has now survived for almost a quarter of a century, longer than the OPEC administered system did. While some of the details have changed, the fundamentals of the current system have remained the same since the mid 1980s. In the light of the 2008-2009 price swings, the current oil pricing system has received wide criticisms with some observers calling for its radical overhaul. These calls are constant reminder of the unease that some observers feel about the current oil pricing system. This comment analyses the oil pricing system highlighting some of its main features and drawing the linkages between the physical and financial dimensions of the oil market.