After decades in which OPEC failed to live up to its reputation as a cartel, there are now signs that the organisation is achieving true cartel status. As a result, despite the fact that the United States is teetering on the edge of recession, OPEC is declining to increase oil production, and thus reduce the price of oil. "OPEC's present market power dates to early 1999, says Verleger. Oil prices then were about $10 a barrel. The 1997-98 Asian financial crisis had cut demand; supply was essentially unregulated. Saudi Arabia undertook frantic negotiations with other major producers, including Iran, Kuwait, Venezuela and non-OPEC members Russia, Norway and Mexico. The result was an agreement to cut production sharply. Compliance with output quotas was surprisingly good; countries were terrified by the collapse of their oil revenue. "
