The United States Exerts Limited Influence on the International Crude Oil Spot Market

In 1979, the world oil market was in disarray. Crude oil prices more than doubled. Unified pricing by the Organization of Petroleum Exporting Countries (OPEC) crumbled as many of these countries first placed surcharges on the price of their oil, and then in a number of cases, imposed whatever prices they believed the market would bear. At the height of this turmoil, the international crude oil spot market drew the attention of the highest levels of government in oil-consuming countries. In June 1979 in Tokyo, concern about the wider effects of the spot market on oil prices in general led the United States and six other major oil-importing countries to pledge, among other things, to encourage oil companies to moderate their involvement in the spot market, and to refrain from buying oil for government stockpiles when this would place undue pressure on oil prices. No U.S. policy or program had been designed to influence directly the spot market. Nonetheless, some programs designed for other purposes have indirect, and sometimes marginal, implications for that market or for U.S. oil company activity in it. Occasionally, the Department of Energy (DOE) has taken actions which also affected the spot market.