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OPEC Despises You, Stop Buying So Much Oil

Posted By Jim On 10/24/2008 @ 12:32 pm In Cars | 13 Comments

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):

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 [3] “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 [4]: “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 [5].

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?


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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/opec-despises-you-stop-buying-so-much-oil.html

[3] Gholam Hossein Nozari said: http://www.iht.com/articles/reuters/2008/10/12/business/OUKBS-UK-IRAN-OPEC-MEETING.php

[4] On OPEC cutting oil production: http://money.cnn.com/2008/10/23/markets/oil/?postversion=2008102312

[5] try to kill Americans: http://www.cfr.org/publication/9362/

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