OPEC's Shrinking Coffers

The Organization of Petroleum Exporting Countries pumped more than oil into the world economy during the 1970s. OPEC also poured billions of dollars that it collected from oil buyers into Western banks operating in the Euromarket, the hub of international finance. Those institutions then lent the funds to borrowers that ranged from Third World governments to multinational corporations. This so-called petrodollar recycling was a major source of cash for world money markets during the past decade.

Now, however, falling oil revenues are turning OPEC from a lender into a borrower and are drying up an important pool of money. This...

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