Cars 
13
comments

OPEC Despises You, Stop Buying So Much Oil

Email  Print Print  

As oil prices soared from less than $20 a barrel at the beginning of the decade to its peak at almost $150, OPEC cashed in. They made overtures saying they’d increase production to increase supply (and increase their revenue) because they were our friends. In reality, OPEC couldn’t do much to ease prices because there simply wasn’t enough refining capacity. But they were nice about it, they said they’d look into it and try to help us out.

Here’s a chart of the price per oil (in black) vs crude oil production in OPEC nations (1973 to 2007, not inflation adjusted):
Price per Barrel of Crude Oil vs. OPEC Oil Production

Oil was less than $70 as recently as 2007. Now that demand for oil is falling, along with the price (which is in the $70s), it seems as though OPEC is quick to reduce supply in an attempt to boost up the price per barrel of oil. What was once called “too high” was now normal, once they saw we could afford $100 a barrel oil.

Iran’s Oil Minister Gholam Hossein Nozari said “on October 4 that oil producers were pumping too much oil and that a price under $100 per barrel was too low.”

On OPEC cutting oil production: “OPEC president Chakib Khelil told reporters last weekend that any production cut could be “substantial,” adding that the organization would try to stabilize prices between $70 and $90 a barrel.”

You don’t have to believe that we contribute to global warming or believe in peak oil, just believe your purses and wallets. OPEC, which controls 40% of the world’s oil (Venezuela and Russia, hardly our two best friends control a lot of the rest), has us by the throat. You can bet that some of our own dollars are going to Iran, who gives some to Islamic fundamentalists, who use them to buy weapons with which they try to kill Americans.

With gas prices falling, you might be tempted to revert to your old ways (like we did after the oil crisis in the 70s), please don’t. I think sending our money overseas to buy a product from someone who despises us is a terrible idea and one we should limit.

Thoughts?

{ 13 comments, please add your thoughts now! }

Related Posts


RSS Subscribe Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

13 Responses to “OPEC Despises You, Stop Buying So Much Oil”

  1. Jim – Just FYI – Venezuela is one of the founding members of OPEC so include them with that evil empire as well.

  2. Mike P says:

    I couldn’t agree more strongly. (Though I’m also a treehugger who believes that a higher price for oil is actually a good thing…)

  3. Stacey says:

    While I grin driving past the ever-falling prices at our gas station, I wonder if all the promises to go “green,” improve gas milage in vehicles and find oil alternatives will now go away.

    High oil (gas and heating) is a great motivator for finding solutions to oil dependence. We’re still doing our part to cut back, but I hope the rest of the country continues this trend as well.

  4. Ron says:

    The problem is that our entire economy runs on oil. Literally, everything needs oil in some form for our economic engine to function. Oil is in antiseptics to zippers, fertilizers to insulation, shoes to shaving cream. Hybrid cars and eco-friendly wind turbines need oil to lubricate their wheels, pulleys, and engines. Oil drives our travel industry, our steel industry, our software industry, our construction industry, our pharmaceutical industry, and our entertainment industry.

    We cannot get around needing oil, not if we want anywhere near the quality of life we enjoy now. So the question becomes, what are we willing to do to curb our need to buy oil from foreign nations that don’t like us?

    The answer isn’t “alternative energy” just yet. Alternative energy won’t help the carpet manufacturer, the roofing manufacturer, the tire manufacturer, the pharmaceutical manufacturer, or the fertilizer manufacturer because oil is a component of their production.

    The answer is to drill for our own. Boycott all you want, but currently oil companies are having difficulty keeping up with worldwide demand anyway. With the incredible amount of economic growth in China and India, they will just sell their oil over there.

    Drill our own and set up incentives to keep it in the US rather than send it abroad.

  5. jim says:

    Alternative energy will certainly help the carpet manufacturer, the roofing manufacturer, the tire manufacturer, the pharmaceutical manufacturer, or the fertilizer manufacturer because lowering demand for oil reduces its price; that impacts their bottom line. No one is saying we turn hedge clippings into carpets or sawgrass into roofing material, we’re saying that can lower demand in petroleum based energy thus freeing up more for the industries that currently have no other option.

    Drilling for oil is a short term solution to a long term problem. Sure we can drill for oil, we can push carbon dioxide into the areas we’ve discovered oil to get the last few drops out, but decades from now we will either have found an alternative or be in serious trouble.

  6. Ron says:

    Lower demand only reduces price if supply remains constant. Shift the supply curve to the left and you’ve accomplished nothing in an environment of decreased demand. Shift the supply curve to the right and prices will definitely come down. Couple that with decreased demand and you’ll see OPEC go down the tubes.

  7. “Shift the supply curve to the left and you’ve accomplished nothing in an environment of decreased demand.”

    I understand what you’re saying in terms of oil prices. And you’re right.

    That said, I strongly disagree with the statement that reducing our oil consumption “accomplishes nothing” even if it doesn’t result in a lower price of oil.

  8. Ron says:

    Graph it. You’ll see how it works. Remember my whole statement: “Shift the supply curve to the left and you’ve accomplished nothing in an environment of decreased demand.” Prices were the only thing I was discussing, too.

    When you move along the demand curve to the right, and you keep your supply curve in the same place, you end up with a shortage, which raises prices. The way prices are lowered is with a shift in the supply curve to the right, or a shift in the demand curve to the left. Given our dependence on oil for everything from the computer your’re using to the carpet in your home to the ice chest you take hiking to the perfume your mother wears to the upholstery in your hybrid is dependent on oil.

    I just don’t see the industries that depend on oil going away anytime in the next 100 years. The economies of too many nations depend on them.

  9. Nabloid.com says:

    But Alberta loves America! And we’re your single biggest supplier of oil (Yes, we supply more oil than any other SINGLE country). C’mon, you know you want it! We have a 1.4 trillion barrels (though only 315 billion barrels are economically recoverable) and if you pay us nicely, we might let you have some. :-)

    That said, I think we need to get into alternatives because those darn OPEC countries are just too nasty and there are better ways to get energy (points at the sun) which are economically (and environmentally) sustainable. C’mon, even oil energy came from the sun. Besides solar tech, and wind tech (wind is caused by the sun if you go to the source), water tech, etc…. it’s all linked. Don’t forget, plants are solar… so ethanol, biodiesel, etc, are just solar collectors. Cellulosic ethanol, algae based ethanol, etc, are all very very efficient and actually make perfect sense as fuels! Oil will remain an issue, but each year we are making headway at developing economic alternatives that will change the world for the better.

  10. ross says:

    Another way to discourage them from killing Americans would be for us to quit sending Americans over there to shoot at… I think they would like us a lot more if we tended our own problems instead of inserting ourselves where we don’t belong. Otherwise, I do agree… the way to cripple OPEC is with competition from alternative forms of energy. Why we haven’t started down that path more aggressively years and years ago is a mystery to me, but imagine if we spent $10B per month on that objective?

  11. !wanda says:

    We give money both directly and indirectly hand-over-fist to Saudi Arabia, and we absolutely know they fund Islamic extremism and tolerate terrorism. No need to “bet” that some of the money goes to where it would hurt us.

    Saudi Arabia and the other OPEC countries seem to survive mostly on oil income. That’s how they pacify their populaces, who have very little say in their own governance. Oil prices that are too low for too long spell trouble for the people in charge of these countries. Mass unrest in the Middle East means trouble for the people in charge of other countries, too. I’m not saying we shouldn’t learn how to use less oil- some day, oil will be less plentiful, and we can decide whether the transition to world with less petroleum will be easy or hard. But I haven’t heard many people talk about the international political implications of lower OPEC profits.

  12. 2001 Prius Driver says:

    You must protect yourself. If Hybrids cost too much, keep driving your old car until repairs cost too much, or you can’t stand it anymore, then use PRACTICAL calculations to determine your transportation needs. If a Prius gets 40-55 mpg and another vehicle that is practical for your needs costs half as much and gets 25-30mpg, it is the better choice. It must ALWAYS be the practical choice, unless you are a performance junkie, then you willingly pay the price. For instance, a Nissan Altima 2.5S averages 25 mpg but a 3.5S averages 22 mpg. Except for quick acceleration and higher mileage the 2.5S does everything the 3.5S does. They both will go up the steepest hills and can accelerate to 90+, and are each great for driving. Why get the 3.5S that requires high-test and costs 40% more to operate, uses more OPEC oil with the only difference being quick acceleration that is almost never used anyway? Be smart for your own pocketbook.
    By the way, the Nissan Altima Hybrid is only beneficial if you drive a lot in town (32mpg) as highway mileage (33mpg) is about the same as the others. But still, you get some vehicles because you WANT them. You may pay for that choice.

  13. Jill Infidel says:

    AMEN Brother!!!! I did a speech about our own petro dollars going to fund terrorism and my professor said he “didn’t get the connection”… Real Easy.. 1. you buy gas from a company that imports from a country that sponsors terrorism as a way to get their point across… 2. That country puts the money in a Sharia compliant bank. 3. The Sharia compliant bank must pay Zakat (2.5%) to “charities” 4. Those “charities” fund fun activities like blowing up schools with little children in it. Get it now?

    The answer? go to http://www.terrorfreeoil.org and look up gas stations that do not import from these countries. I go a couple of miles out of my way to buy from Cenex or Flying J. It is worth it to me.


Please Leave a Reply
Bargaineering Comment Policy


Previous Article: «
Next Article: »
Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.