You wouldn’t think that global politics would have a place in an auto blog. But today I’m going there and here’s why:
We drive cars. Cars need gas. Gas comes from oil. And oil comes from OPEC.
The political firestorm that is OPEC currently comprises of 12 countries (The U.S. is not one of them). Here’s a brief look into how two of them use oil money:
Venezuela: funds their socialist government and suppresses opposition. They’ve also used oil money to buy Russian weapons.
Iran: they have the second largest oil reserves in the world, so it’s no wonder economic sanctions have little effect. They make their money in oil, and use that money to help spread their influence through Hamas and Hezbollah in Lebanon and Israel.
Many OPEC countries actually build their budgets based on the price of oil. If prices begin to fall below a predetermined level, OPEC can step in and decide to decrease production, thus increasing prices and fuelling economies. Nothing puts the economic squeeze on an OPEC country more than a cheap barrel of oil.
Now that prices are hovering around $70 per barrel, OPEC countries are feeling that pinch. And just yesterday, OPEC announced they would cut production by at least 1 million barrels per day. As a result, prices should increase enough to ease the economic pressure on countries like Venezuela. At least for a while.
I don’t know about you, but I don’t like to be controlled and I feel like OPEC countries are the worldwide equivalent to 6th grade bullies. The best way to defeat them is to just stop giving them money.
I want to see an end to violence in the Mid East. I want to see terrorist groups dissolved. I want people living in Venezuela to choose how and where to live. I DON’T want to see these countries obliterated, I just want to see their economies crumble, followed by OPEC.
Since OPEC countries are dependent on high oil prices, it’s not war in Iraq that is going to bring peace to the region.
It’s refusing to buy that region’s oil.
And that means using as little gas as possible until we can supply and sustain our own energy needs.
What are your thoughts on OPEC?