Comment by AnthonyMouse

> Usually we end up with cartels in such cases, see OPEC, mafias etc.

Whether a cartel forms is independent of whether a product is a commodity. To the extent that commodity markets are more likely to form a cartel, it's only because it's harder for them to form a monopoly.

The general problem is that if your legal system allows competitors to buy each other then they have the incentive to do that instead of competing. This is why there are supposed to be antitrust laws, and why we get problems whenever they're not actually enforced. But in a typical commodity market, even buying the competition doesn't quite work because someone new can always enter the market. Congratulations, you've cornered the market on landscaping services... until some unemployed fellow who already owns a lawnmower and a truck starts advertising their services.

OPEC is kind of a special case because the product is entirely fungible but it's also finite and consumed by usage. Landscaping services aren't meaningfully finite, if demand increased then supply could match it under any plausible scenario. Copper is finite but it isn't destroyed by usage, so if someone had a lock on copper mining then people could still get it by recycling existing products.

Whereas oil is finite but then the end customer burns it. If Saudi Arabia cuts production, Germany can't make up for it by extracting more domestically because they haven't got enough in the ground, but they also can't capture the exhaust from their cars or power plants and turn it back into petroleum because the product is really energy and it takes more energy to do that than you get from burning it to begin with. So if the largest exporters get together, they control enough of the market to control prices and there is no real way for anyone else to enter the market with enough production capacity to change that.

Until you realize that the product is really energy and you can get out from under their thumb by switching to electric cars and generating electricity without burning fossil fuels.