An Analysis of the Supply of Oil

The demand for oil has been studied more extensively than the supply of oil, perhaps because the theory underlying the demand for oil is more developed. But a better understanding of the supply of oil is also necessary in our analysis of the oil market, and this article is an effort in that direction. More specifically, in this article we are interested in determining the shape of the supply of oil for an oil-exporting nation and the factors that cause this supply to change; upon aggregation of such individual supplies OPEC's supply can then be obtained.