Oil Ties: U.S. Relationship with OPEC May Harm Nation, Payoff for OPEC

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By Justin Haskins, Breitbart:

It’s not an unfamiliar sight: Oil prices go up, and influential U.S. politicians, sometimes even presidents, run to Saudi Arabia hat-in-hand, hoping that Middle Eastern royalty thousands of miles away will lower gas prices at the station on the corner and keep voters happy.

This all-too-common scene has helped to keep gas prices in the United States below those in Europe, but now that oil prices have plummeted to 2010 levels, influential members of the Organization of the Petroleum Exporting Countries (OPEC), such as Saudi Arabia, may finally move to cash in the many favors granted to the United States, putting the nation’s growing domestic oil market in jeopardy and potentially harming U.S. job creation.

While Americans were still feasting on turkey leftovers, it was widely reported that OPEC agreed to keep oil production stable at a meeting in Vienna despite a reduction in global demand, a move that surprised analysts and led to a drop in already-low oil prices–currently hovering around $65 per barrel.

OPEC’s decision to maintain its production target of 30 million barrels of oil per day may appear to be good news to U.S. oil consumers today, but the self-inflicted wound that is OPEC’s decision is actually a well-planned, long-term strategy to keep its tight hold on its most important energy markets by dropping prices so low that competitors are forced to cut production and lower market shares.

The most important and threatening competitors to OPEC’s powerful position are U.S. energy producers, especially those in the growing shale industry. According to a 2014 Congressional Research Service report, domestic oil production has skyrocketed, going from 5.2 million barrels produced per day in 2009 to 7.2 million in 2013–and the numbers continue to climb. …

[Published by Breitbart, read more here]

Justin Haskins