During 1983, OPEC cut oil prices from $34 per barrel to what amount?

During 1983, OPEC cut oil prices from $34 per barrel to what amount?

• A. $25/bbl
• B. $29/bbl
• C. $32/bbl
• D. $40/bbl

Answer: (B)

OPEC used price as a tool to defend its market share when demand was weak and non-OPEC supply was rising. In 1983 they decided to cut official selling prices to keep buyers from switching to other producers, which led to the price falling from about $34 per barrel to $29 per barrel. The $29 figure is the historical result of that move. The other options don’t fit: a much larger cut like $25 would be a bigger slash than what happened, $32 would be a smaller cut than the actual move, and $40 would be an increase, not a cut.

OPEC used price as a tool to defend its market share when demand was weak and non-OPEC supply was rising. In 1983 they decided to cut official selling prices to keep buyers from switching to other producers, which led to the price falling from about $34 per barrel to $29 per barrel. The $29 figure is the historical result of that move. The other options don’t fit: a much larger cut like $25 would be a bigger slash than what happened, $32 would be a smaller cut than the actual move, and $40 would be an increase, not a cut.