I have seen a number of articles over the years refer to OPEC as a “paper tiger.” I can understand why that impression. After all, they seem to be pretty ineffectual at controlling oil prices.
But I think the argument is wrong. Events that impact the oil markets play out over long periods of time. So OPEC action or inaction may not make a big impact on oil prices for months or even years.
I believe that the run up in oil prices that started about a decade ago was largely due to OPEC misjudging oil demand growth and not investing enough money in new production.
