This report was originally published by M.K. Matthews on The Organic Prepper
Global economy and geopolitics are underpinning the oil price surge and gas prices are going up.
Who recalls the oil embargo of 1973? That was when the Arab-dominated Organization of Petroleum Exporting Countries (OPEC) announced they were cutting oil exports to the United States and other countries that provided military aid to Israel during the Yom Kippur War of October 1973.
In six months’ time, gas prices had quadrupled. Prices remained higher even after the embargo ended in March 1974.
But that could never happen again…Or could it?
The current members of OPEC are made up of twelve countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
Let’s look at some of the OPEC members and their current interactions with their friends, frenemies, foes, other random players, and the resultant alliances.
For weeks, tensions have been rising between Iran and Israel, It began in February when, according to Israel, an armed Iranian drone originating from Syria penetrated the Israeli airspace. Israel downed the drone, then attacked the caravan which launched the drone from the T-4 airbase deep in Syrian territory. An Israeli F-16 jet was brought down by a Syrian missile while over Israeli territory. At this point, Israel launched an extensive retaliatory strike on Syrian air defenses and Iranian forces in Syria. This all occurred in one day. It was remarkable because no Israeli plane had been brought down since 1982.
Two months later. seven Iranian Revolutionary Guard Corps were killed in an airstrike on a Syrian air base, which Iran blamed as being done by Israel. Mutual threats of retaliation have since been issued by both Iran and Israel. Ultimately the conflict between the two countries depends on the fate of the nuclear deal. On May 12th Trump is anticipated to issue his decision on the deal.
Meanwhile, Iran is dealing with numerous internal issues. To name a few: a struggling economy, the worst drought in 25 years, increasing civil discontent, public demonstrations, and labor strikes. Last week Iranian President Hassan Rohani banned money exchangers from selling U.S. dollars and Euros. Travelers to nearby countries are limited to purchasing just 500 Euros ($615), while those traveling to more distant countries are limited to purchasing 1,000 Euros. Iranians may not hold more than 10,000 USD or 10,000 Euros.
In Israel, longstanding anti-Netanyahu demonstrations against government corruption have gained in size and sentiment. Saturday’s march in Tel Aviv numbered upwards of 4,000 people. Other more recently organized demonstrations, arranged by the Hadash party and composed of Arab Israelis, protested U.S. strikes on Syrian outside the U.S. Consulate in Haifa this weekend.
Meanwhile in Venezuela. Bloomberg outlines the catastrophic economic crisis:
“Venezuela, which holds the world’s largest oil reserves, has seen a steady decline in production amid lack of money for maintenance and exploration. Venezuela imports about 2 million barrels of heavy naphtha per month, and all of it comes from U.S. Gulf refiners, according to data compiled by Bloomberg. The U.S. is leaning toward imposing oil-sector sanctions on Venezuela before the country holds April 22 elections that opposition leaders have vowed to boycott, according to a senior State Department official. The official, who asked not to be identified discussing private talks, stressed that no decision has been made and the U.S. is still weighing the impact such sanctions would have on ordinary Venezuelans as well as on U.S. refiners that import heavy Venezuelan crude.” (source)
A fire on the Libyan oil pipeline has dramatically reduced their output. Libya suffered a major fire on its major export pipeline that was attributed to terrorist activities this past weekend reducing their oil production from 300,000 barrels per day by at least 80,000 barrels per day. It is unknown how long it will take to make the necessary repairs.
Here’s the conclusion reached by OPEC.
OPEC has been meeting this last week and Reuters reported that a Joint Technical Committee meeting held Thursday found that the glut of global oil supplies has been virtually eliminated, citing two sources familiar with the matter.
“Industry sources have linked this shift in Saudi Arabia’s stance to its desire to support the valuation of state oil company Aramco ahead of the kingdom’s planned sale of a minority stake in an initial public offering.
The supply cut has helped boost oil prices this year to $73 a barrel, the highest since November 2014. Oil began a slide from above $100 – a price that Saudi Arabia endorsed in 2012 – in mid-2014 when growing supply from rival sources such as U.S. shale began to swamp the market. But the kingdom wants the rally to go further. Two industry sources said a desired crude price of $80 or even $100 was circulated by senior Saudi officials in closed-door briefings in recent weeks.” (source)
Some OPEC nations and their allies have pushed for the extension of the output curbs beyond 2018 and up to the middle of 2019, Iraq’s Oil Minister Jabbar al-Luaibi said last month in Baghdad. (source)
But things are going well for Russia, China, and Qatar.
Bilateral relations between Russia and Qatar have been blossoming lately. This is very likely related to the blockade imposed by Qatar’s Arab neighbors. Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt, who collectively imposed a unilateral blockade on Qatar on June 5, cutting diplomatic ties and closing their land, air, and sea borders over Qatar’s alleged support for terrorism.
In response to the blockade, Qatar, the world’s top producer of Liquefied Natural Gas (LNG), diversified and expanded their opportunities and opened the door to tens of billions in income by selling LNG to China. They are planning on increasing production by 30% by 2024 to meet the demand of the Asian market. China has stepped up to do more business with tiny Qatar in other areas as well. (source)
Old alliances are dissolving and new ones are being created
Plans are being made. Are we just one more hurricane away from losing more of our domestic oil and gas production? Are global geopolitical tensions where they were in the 1970’s?
No, not yet, but there isn’t a lot of margin for error as the world plays a risky game.
Please feel free to share any information from this article in part or in full, giving credit to the author and including a link to The Organic Prepper and the following bio.
Daisy Luther is the author of The Pantry Primer: A Prepper’s Guide To Whole Food on a Half Price Budget. Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at [email protected]</e
I paid $3.54 for gasoline yesterday. Over a third of that is tax. The oil used to make that fuel came from Indonesia.
My Diesel is around $4.50 WELL over a third of that is tax. The Diesel on my island comes from Canada.
I’m getting very irritated that middle eastern oil which most Americans no longer use, affect our local prices so much.
So once again its Israehells fault. The US should have dumped this Israehelli parasite back in 1973 when we had the chance. So instead Americans were punished and paid Quadriple the cost of fuel back in the 1970’s because of Israehell the evil doer. And things get worse and worse from then on. The US foreign policy is suicide drip, drip, drip.
And of course Israehell thinks they own the entire middle east so their US F15 plane was shot dow over Israehell territory? FN liars. Israehell are scumbag liars. They routeently fly over Syria and Bomb it. Lets talk about Israehell shooting down a commercial ariliner MH 17 over Ukraine to then blame Russsia in a false flag attempt and got caught. I don”t believe a single word that spews out of Israehells mouth. They are lying scum thieves that deserved to be wiped off the planet for ever.
You mean the US economic sanctions destroy and cripple economies because the US shuts down their banking ability. How would you feel if all banks shut down and your money supply dried up? Again all because of the US relationship with Israehell. So innocent people in countries around the globe have to suffer because we support the parasite Israehell.
And Terrorists blew up Libyan oil fields? Yoy mean Libyan nationalists blew up the oil rigs to stop their oil assests from being stolen by the west. Thats why Ghadafi wad killed so we can comtrol the oil. So amybody who protects their countries assets from the West’s looting are called Terrorists. Brilliant propaganda!! More than half of brain dead Americans will buy that crock of BS.
The US Foreign policy is a total disaster. We are on a course of full suicide as the world yurns against us because we support Israehell. Wake up you dopes. Dump Israehell and 90% of the worlds problems dissapear. Dump Israehell!!!!!!!
I agree. these jew leaches are the cause of all the worlds problems.
New gas station JUST opened up this month in town, and a gas war has erupted allowing me to grab it up by the drum for $2.35/gal.
the kicker? For a few dimes more, they offer an ETHANOL FREE 91 octane. Perfect for long term storage:)
Yes, its short term but… go me.
It is easy, the oil companies raise the price when they want to make more money!
There’s something about the oil industry you fail to understand, along with the word “fungible” that governs it’s prices.
Gas Prices at the pump have nothing to do with Supply and Demand. The prices are manipulated by Wallstreet speculators, where just $1 dollar on paper controls $100 of oil trading. Just like Gold and Silver prices are manipulated down to where they want the price to protect the phony dollar. The US market is a total scam so they can blame other countries for the global problems the US creates. And we do this because we are exceptional..
If I hear that BS propaganda line again that socialism brought down Veneszuela, that person needs to be slapped silly. And you Authors saying that are ignorant dump [email protected] US banking sanctions destroy countries. Now forget all of this and go play on Facebook or shop on Amazon. Stupid is.
Gas Prices at the pump have nothing to do with Supply and Demand. The prices are manipulated by Wallstreet speculators, where just $1 dollar on paper controls $100 of oil trading. Just like Gold and Silver prices are manipulated down to where they want the price to protect the phony dollar. The US market is a total scam so they can blame other countries for the global problems the US creates. And we do this because we are exceptional…
If I hear that BS propaganda line again that socialism brought down Veneszuela, that person needs to be slapped silly. And you Authors saying that are ignorant dump [email protected] US banking sanctions destroy countries. Now forget all of this and go play on Facebook or shop on Amazon. Stupid is..
Israel blackmails about 1/3rd or 30% of US Congress to keep voting pro israehell BS. Israehell writes the US foreign policy, then blackmails Congress to approve it
All US Politicians being blackmailed by Israehell needs to resign immedietly ti Save America and stop voting for these shills like Lindsey Gramm and John Wayne McCain.
Fact: socialism brought down Venezuela. Specifically, by tying the entire country to the state-run oil companies and funding their entire lifestyle on the petrodollar. Nothing like a single point of failure begging to be manipulated.
Saudi Arabia and most of the Middle East operate in the same fashion putting all of there economy in oil yet they survive unless and until the US deems otherwise.
oops their not there……
To really soften up the tougher ‘meats’ – putting it into a pressure cooker works pretty good. That’s the reason for this. Forget the pot being slowly raised to a boil. Blow the damn lid off the cooker.
If you can make a snapper turtle meat tender anything can be made tender. Liquid, low heat and a long time will dissolve a dinosaur.
I paid $2.19 for regular unleaded WITHOUT Ethanol and get 1.8 more mpg to boot. If you are willing to use the stuff that is adulterated with corn, it is even cheaper.
Amazing what happens when you produce your own oil and don’t tax the shit out of it.
I’m in rural Texas aka The Free Zone.
Not reading whatever stupid rationalization this is of oil gouging thievery.
When the world economy collapses (just a matter of time)…..so will the price of crude, as demand will collapse also. I predict under $1.00/gallon in less than 18 months.!
When gas and oil prices, the prices on everything(except horse manure) goes up. You pay and pay and pay. Peter Schiff and other economists can look at economic indicators to try to forecast inflation but nothing can beat the signs at our local service station for forecasting inflation. If those numbers rise sharply so will inflation!
Gas went down 14 cents a gallon a few days ago, from $2.69 down to $2.55. This is in Elizabeth City, NC. Some places are higher, but this was at the Speedway.
Oil is a global market, which means it’s all in one pot. Whatever affects the supply in one country actually affects the entire pot. The only way to fix our prices would be for us to withdraw from the world market entirely, neither buying or selling oil to anyone else in the world.
It’s a wonder that the Sand Oil from Canada is flowing through pipes in the US. But is bound for China. MAGA. Keep the Oil, Food NG. For the Forgotten Man here in the USA. We the American people are being Bleed dry.
God, it is just the same old flipping horse-crap situation. Greedy mutt Corporate America, the wonderful US Gov’t and don’t forget all the sand apes in the lovely Middle East all deserve to be dealt with once and for all. Enough is enough people – how much longer are we all going to just sit back with our meat sack in our hands and continue doing Nothing?? Think about that for a moment . . .
$2.84 gal today. Seen it for $2.99 and $2.68 today too. It really depends what area your in. The poor ghetto spots it’s always cheaper. The rich areas it’s always the highest. Some countries people pay around $6 a gal. We really are lucky. The folks who complain the most drive gas pigs like suburbans. Not sayin drive a piss pot Honda Fit but you need a efficient vehicle that suits your needs. Minivans are great seats come out and it can be used for hauling stuff. It will haul a trailer easily as most can tow 5000lbs and gets close to 30 mpg. Cops don’t give them one look unles your driving like an ass. Dig the van man.
Here in Tucson the price is $2.55 and rising every other week. So why can’t we use the oil we’re supposedly producing here?
It wouldn’t matter as its value is what it can get in the world market. There is no such thing as “our oil” being that the US is not a communist nation. The oil in the US is largely used here anyway. In the end the US still imports a net of approximately 4 million bbls/day (10 million import, 6 million export = 4 million net import). The US is not oil self sufficient at current demand and production.
because we regulated gas refineries pretty much put of existence
I spent my adult life working in an oil refinery. The reality is the US has excess refining capacity as demand has dropped coupled with “creep”. “Creep” is the de-bottle necking of existing refineries. Many have increased capacity by 30-50%. The small 100K/ bbls/day simply weren’t worth the environmental upgrades. US oil consumption has dropped by roughly 3 million bbls/day since 2008 from 20 million to 17 million.
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When gasoline prices rise, the quantity of gasoline sold must drop if you hope to stop or reverse further price increases. The sellers must see that “If you raise the cost of gasoline, you will sell less gasoline and make less profit!”. The problem is that we need a certain amount of gasoline for our vehicles and maybe heating oil for our homes. Economists say that the price is inelastic which is to say that sellers can gouge the hell out of the buyer and sell just as much regardless. Anything we can do to reduce the amount of gasoline used helps. Sellers will charge the price that they can get.
The oldest principle of economics is that supply and demand for a good sets the price of the good. For oil and gasoline, this should be changed to “Them that have the supply sets the price and them that have the demand, pays it through the nose!”
The “wiggle room” in gasoline is in refining margins that typically are 12-20 cents a gallon. Below 12 for any extending time the wear and tear on equipment simply isn’t worth it. The big cost in gasoline is the crude which is a function world supply/demand. China in the same time frame increased its oil consumption by roughly the amount the US decreased (3 million bbls/day). Chinas demand is approximately 12 million bbls/day and climbing.
Everything going up except wages.
Thats the goal to bring down the developed world while simultaneously raising the developing world. Think of it as communism on a macro scale between nations. Its globalism, the homogenization of standard of living and use of resources. I’m not advocating it, I don’t like it but it is what is occurring. Regardless of the question its the official answer and policy. Only the most naive would believe that its just happenstance / coincidental. The world is being steered and directed.
Floyd D. says: April 30, 2018
Federal gas tax of 18.4 cents per gallon, Pennsylvania’s state tax of 50.5 cents per gallon, brings the combined tax to 68.9 cents per gallon here in Pennsylvania. As Oil Speculators grin and drive up gas prices, speculating with rumors of war and its scarcity, which are additionally laid upon production= consumer pays the rouse. THINK OF IT THIS WAY: Gas price in PA.$ 2.85 MINUS Fed. and State Tax $ .69 = actual pump prices, without greedy hands, is $2.16 per gallon. With the average car mileage of 20 miles per gallon YOU ARE PAYING almost 11 cents PER MILE.