Here’s Why Gas Prices Are Skyrocketing Right Now

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by M. K. Matthews

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.

How much is gas in your state? Have you seen an increase in the price lately? Please share your thoughts in the comments below.

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  • gas prices here have gone up a nickel in the last 3 months, a dime in the last 6 months and 14 cents in the last year and a half other than spikes when refineries were down……. so excuse me if I yawn at this article.

    • Gosh, you’re lucky! Here in Virginia, regular has gone from $2.20 to $2.49 just in the past 2 weeks.

    • Where do you live Matthew? Here in Phoenix AZ gas has gone from $2.19 first week of March to 2.73 today. That’s 60 cents in 6 weeks!

    • 5/18/18 Prices in the Syracuse NY area jump at least 5 cents a gallon a day. one station around here just raised their price 12 cents to $3.099. I personally believe that the progressive/communist /democrat party is behind this slap in the face of its American citizens!

  • America/Israel/NATO have been Invading & Regime Changing Oil & Pipeline Countries to Control the World’s Oil Supply Under the Guise of Spreading Democracy since their 911 Coup/War of Terror.

    Protect The PetroDollar At All Cost$$$$$

    • I imagine war will raise gas prices nicely. $13 or more a gallon when you can find it. Will do wonders for the economy.

  • “Who recalls the oil embargo of 1973”? wow, nothing even close happening now. opec had a stranglehold on the united states, which has been largely erased. we had $4 a gallon a few years back, and we are not even close

    • OPEC is controlled by the West. They aren’t screwing the U.S. government. Just the American citizens, with the assistance of the U.S. government.

  • The oil embargo was a lie, Nixon took the US off the gold standard in 71 and created the petrodollar. In 73, they, the US gas people, wanted higher prices, they created a shortish just to get the price of gas higher. The US imported less than 20% of their oil at that time. Gas went up to 65 Cents and all at once there was plenty of gas.

  • Gas prices where i live have risen .60 cents in the past 2 months, making any news of a mere .20 cent a laughable offense. from early march when the price was near $2.25 gal it went to $2.45gal was tough to bear, but $2.89gal is far worse, especially seeing the price of everything else affected as a result.

  • The prices in New York have risen dramatically! In one day the gas prices jumped almost 20 cents! Presently our average price for gas is $2.84 per gallon, from around $2.60 a gallon just over a week ago. At this rate it will become more dfficult for people to drive with prices sky rocketing!
    Even harder hit will be people who are on a fixed income or low income to get around!
    I was young but still remember waiting in line, with my Dad, to get gas which could be hours waiting. Just to be told you could only get 5 gallons or be told sorry we’re all out of gas.
    I pray it doesn’t come to this again! From the looks of things though that’s where we are all headed….

  • I am in NW PA. Our gas has been $2.99(9) for almost a month or better. We are wondering if it will continue to climb. Usually Erie is .40 to .20 cents under us but their gas price matched ours this week.

    • My mother lives outside of Erie, I live in Ohio. Are you close enough to make crossing the border viable? Ohio is usually at least 20¢/gal cheaper. Also totally off topic but do you know of any prepper groups in the Erie area?

      • Hi Kristie. I am outside of Titusville. About an hour below Erie. I wish I was closer to the Ohio line. I have a sister over in Fairborn and their gas is a lot cheaper. I don’t personally know any prepper groups. I have made connections with a lot of my neighbors and local farmers. We try to trade items and labor and what skills we have and network within this group. We have someone we help hay in exchange for hay and pasture for our small herd. My husband repairs equipment in trade for using the equipment. It took about 5 or 6 years to make connections. We also go to livestock auctions to meet other like minded people. I hope you can find people to start up a buy/sell swap/trade group. Everyone has something to offer. Good luck and hope I have been helpful!

  • All you people complaining should as yourselves why the gas prices have gone up so much in YOUR areas, but not so much across the entire nation? Could it be multiple factors? Supply-and-demand, lack of local refining capacity, state taxes per gallon…ALL of that matters. If gas has gone up much here in “flyover country”, it hasn’t been enough to notice yet.

    • Heartland Patriot I feel sure some raises may be based on the things you listed. I believe most comments were just answering Daisy’s request for our input. Where I am, it is not a supply or demand issue and as we just completed three years of added tax to pay for road and infrastructure repairs, it is not tax. We are wondering what caused the increase. Most of us think the excuse is “middle east” unrest. The usual culprit.

  • Greedy lying bloodsucking oil company crooks control and rape Americans just like always. This is the fate of cowards who surrender to traitors and murderers and heroin pushers from the pentagon. The pentagon is pledged to serve the British Empire permanently. The pentagon wipes its ass with our Declaration of Independence. Fake money military scrip Federal Reserve Notes are not silver. Silver is honest money.

  • NC regular gas price increased $0.23 cents per gallon in the last 7 days!

    I have oil rights in FL where the price has held steady the last 12 months but prior to that had a drop in revenue of 16% for its year.

    We are headed out west where the average cost on a gallon of unleaded is $3.48.

    I will grant that there are a few of us here where the $ increase is just a nuisance we will deal with, but many have sought communities like this very forum out because that increase is the difference between the lights on one more day or practicing off grid skills because we were short sending the electric company their due. Let’s all try to remember that these increases no matter where they come at, affect every day people we know and love.

  • Here in Northern Lower Michigan gas was up to $2.87 last week. It was down to $2.76 yesterday, but it is always higher Thursday through Sunday. We haven’t seen gas at $2.20 in ages.

  • Why are selling oil that we produce then turning around and importing oil from high end sources??? We produce oil in sufficient amounts to satisfy our domestic needs Stop supporting these blood sucking high end countries,=.

  • In NC Missouri gas has been sitting at $2.39 for a month now. Just went up to $2.44 yesterday. Not complaining till it gets over $3.00!

  • Oil prices are a manipulated scam designed to impoverish those dependent on the substance. Oil is not a “fossil fuel” and its derived from the Earth through its natural processes. It’s practically unlimited in supply. Given its abundant nature and after production, regular gas should never be much more than $1 per gallon, at the pump. It all boils down to screwing people. Nothing more and nothing less.

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  • Update. Our gas is now up to $3.15 regular. This is going to cause the price of everything to go up.

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