“The inexorable greed and insatiable lust for dominion over the United States exemplified by those members of the Organization of Petroleum Exporting Countries has become more than evident in recent weeks. The nations that comprise this organization should be coming under increased scrutiny and fire, as it is clear that their lone goal in life is to tighten their already deadly stranglehold on the United States’ energy needs.””
The inexorable greed and insatiable lust for dominion over the United States exemplified by those members of the Organization of Petroleum Exporting Countries has become more than evident in recent weeks. The nations that comprise this organization should be coming under increased scrutiny and fire, as it is clear that their lone goal in life is to tighten their already deadly stranglehold on the United States’ energy needs.
Instead, however, this nation has become obstinate in regards to their stance on oil and gas prices; blame Big Oil companies.
Holding Big Oil solely culpable for increased prices at the pump has become an irritating cliché and even a scapegoat for some citizens of this nation who are quick to point fingers when they are either uninformed or ignorant of the factors by which gas prices are ultimately determined, in which case their opinions and objections are not welcome. Unfortunately, the latter are usually the ones who speak the loudest and discourage some of the more intelligent and open minded people of this nation, and lead them to believe that rapacious corporations and big oil companies are responsible for our economic woes.
Oil is a good that drives our economy, literally. Right now, the world needs oil for fuel, plastics, lubricants, perfumes, asphalt, insecticides, etc. To understand how the prices of oil fluctuate and how they are derived, we must understand price elasticity of demand. Price elasticity of demand is defined as a measure of the sensitivity of quantity demanded as it relates to price changes. From that we can understand that the price elasticity of demand for oil is relatively inelastic, as demand for such usually changes only slightly as prices rise and fall. When gas was $2 a gallon, you drove down the road to the drug store to get a loaf of bread. When gas was $4 a gallon, you still drove down the road to get that bread. This is opposite of an elastic good, such as candy. If the price for a candy bar is twenty dollars, you will more than likely abstain from buying it, as it is not an essential need in your life. OPEC knows that we must buy from them no matter how extreme the prices are for oil, because it is an inelastic good. This is where they thrive, where their stranglehold is felt.
OPEC’s cartel of eleven predominately Middle-Eastern countries get together on occasion and decide how they can take more money from the United States and other large consumers of crude oil, and insert it into their own economic markets. As you look at the organization’s statute, we can clearly see this defined, The principal aim of the Organization shall be… the determination of the best means for safeguarding [members] interests, individually and collectively, and Due regard shall be given at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries. That being said, do you believe that OPEC has any concern for how much you, an American citizen, pay at the pump? No, they do not, and this is shown in their most recent emergency meeting.
OPEC is able to effectively raise and lower gas prices when they hold conferences to decide how much oil is going to be produced on any given day. The organization recently held an emergency conference because even though they decided to cut production by 1.5 million barrels a day in their last meeting, prices continued to plummet due to lower demand around the world. Ali al-Naimi, the oil minister of Saudi Arabia, OPEC’s largest exporter, said after the emergency meeting that the organization expected the most recent cuts to raise the price of a barrel of crude oil from under $50 to $75 dollars. He concluded that $75 is a fair price. Let’s let the free market decide what price is fair, Mr. al-Naimi, not an organization of assumed potentates.
It is imperative that this nation digress from thinking that domestic oil companies are inherently evil, and seek to gouge and profit grossly from the American people. Oil companies are at the mercy of entities such as OPEC, whose purpose is to perpetuate the record wealth transfer from our nation to theirs. The time of OPEC’s control of our wallets and the nation’s economy as a whole must cease. How do we facilitate such a notion?
Drill for our own oil.
Entities who have assumed control of the world such as OPEC will be crushed without this nation as a consumer for them. The members of OPEC believe they control this country because we are oil hungry, but it is really this country that controls them because of the former.
If you don’t like the idea of drilling for our own oil, then fill up your tanks now because in the coming weeks it is likely that prices at the pump will soar back above $2, not because of Big Oil companies, but because of OPEC.