'Oil Barrels, 2008' (detail) by Chris JordanEnlarge Photo
There’s bad news this morning for drivers awaiting cheaper gas: the Organization of Petroleum Exporting Countries (OPEC) has reached a decision to maintain current output levels, not increase them as had been hoped.
Saudi Arabia and its Gulf neighbors had pushed for increased output, largely to calm fears that crude was overpriced for market conditions and worsening world economies. Iran, the second largest producer within OPEC, opposed the increase in output and prevented a consensus on additional production.
Fears over deteriorating conditions in Libya and Yemen have created concerns about supply disruptions and potential oil shortages. Struggling world economies make the current oil price of $100 per barrel unsustainable over time, and many believed that OPEC would raise production at today’s meeting to lower prices and calm market tensions.
Iran’s blocking move gives some credence to the theory that oil dependence is becoming a matter of national security. With U.S. ally Saudi Arabia clearly no longer in the OPEC driver’s seat, this morning’s meeting doesn’t bode well for either a decrease in retail gasoline prices or for the country’s stalled economic recovery. With no additional oil production coming from OPEC, the best that motorists can hope for in the short term is that gas prices will remain flat.