Why the OPEC has wanted cheap oil all these years

 

The OPEC ganging up to drive up oil prices is good news for producers and investors. It may not be as good for consumers, but rest assured. It’s not going to get too bad this time around. And for a very powerful reason: the oil cartel doesn’t want the barrel to reach the crazy levels of a decade ago.

So, don’t be fooled by the bellicose rhetoric of Mohammad Sanusi Barkindo, OPEC’s secretary general. It makes you nostalgic for the bad old days of the 1970s, doesn’t it?

But all that is white noise. There is a market rationale behind the OPEC’s moves. “Saudi Arabia saw that propping up oil prices would mean ceding more market share to surging U.S. shale production.” That, too, would encourage “existential threats like electric vehicles, so the kingdom let rip.”

In plain words, the cartel wants you to keep your gas guzzlers and remain hooked to oil. They simply want to keep exploiting the mechanics of addiction. So, do yourself and the world a favor: go energy efficient. And, if it suits your budget, do get that electric car. It will be better for all of us.

 

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