Rising Gas Prices Have Nothing to Do With the US and Everything to Do With OPEC and Russia

Over the last week, gas prices across the country have risen dramatically. While the White House is taking the brunt of the abuse, the real culprits behind skyrocketing gas prices are OPEC and Russia.

A Tough Summer for Road Trips

Over the last seven days, gas prices across Texas have risen as much as six cents. In Wyoming, it’s risen ten cents. In every corner of the country, drivers faced a dramatic 4-cent-a-gallon increase at the pumps.

In response to the hike in gas prices, some pointed the finger of blame at Donald Trump. They argue that the President’s exit from the Iran Deal has triggered the spike. In other words, people are worried about Iran’s ability to export oil, so the price of oil rises in preparation for the expected shortage.

That’s a convenient solution to the problem, but it’s not right. The real issue lies in the OPEC/Russia connection.

The World Is Crying Out for Energy

The simple fact is that there is a whole lot of oil and natural gas on planet Earth beyond the supply found in Iran. Questions about the availability of oil coming out of a single country shouldn’t impact the global price of crude so drastically. The problem isn’t with Iran; it’s with OPEC/Russia failing to meet the rising demand for oil.

As more and more nations build up their infrastructure, the demand for oil and natural gas has risen to epic proportions. Even as the United States continues to smash production records month after month, the US energy industry is still struggling to meet international demand. The need for energy is too high.

Pick Up the Production Already, Folks

Which brings us back to OPEC/Russia, who entered discussions focused on how to proceed moving forward. Whatever clandestine decision they landed on, the result has not been to increase production significantly. OPEC, in particular, is having a tough run of it.

In May, OPEC output hit a 13-month low thanks to turmoil in Venezuela and outages in Nigeria.

More Oil Is Good for Everyone

Regardless of what the oil and gas landscape is for Iran moving forward, the most apparent solution to oil concerns is to follow the United States’ example and pick up production as quickly and safely as possible. There’s certainly more than enough desire for crude oil and shale to sustain several entries in the international marketplace.

At this rate, OPEC/Russia need to get back in the game. The United States can’t sustain the price of oil on its own.

The United States Is Now the World’s Undisputed Oil and Gas Leader

It’s been a bang-up year for the United States’ oil and gas industry. Since a January report from the US Energy Information Administration stated in no uncertain terms that the United States energy infrastructure was poised to change the world, the domestic oil and gas industry has seen a boom unprecedented in the industry. In the short six months since the EIA’s announcement, the United States has ramped up production to such a degree that world energy powers like Russia and Saudi Arabia will soon find themselves outpaced.

The Good News About US Oil and Gas

Industry insiders felt the oil and gas industry rumble to life in the closing months of 2017. A collective sigh of relief could be perceived as the sector began to pull out of a three-year nosedive. Then, in January of 2018, the US’ independent energy statistics agency, the EIA, released a monumental report.

Praising the “noteworthy resilience of shale gas” in the United States, the report stated that the industry’s ability to weather the downturn, combined with groundbreaking technological breakthroughs would enable “United States oil and gas output in 2040 to a level 50% higher than any other country has ever managed.”

Recent Politics Are Good for Business

The United States oil and gas industry has also been feeling the favor of the developing geopolitical scene in recent months, as well. As Russian and Iranian companies watch potential customers dry up, the United States’ is appearing as an increasingly efficient, cost-effective, and — perhaps most importantly — stable option in the global marketplace.

Perhaps that’s why Japan meets its rising need for liquid natural gas by turning to the United States. In April, the country took receipt of its first shipment, a promising step forward in the quest to “power millions of Japanese homes and businesses” with United States LNG.

A Thriving Oil and Gas Industry Is Good for Everyone

As the United States has climbed the rungs of the international oil and gas market over the last seven years, the economic benefits have been immeasurable. At the moment, the industry is attracting millions of potential investors, money that filters out to sectors of every stripe.

That means more jobs, more income, and more tax revenue.

According to the EIA, we’ve only begun to feel the benefits of the United States’ oil and gas boom, but if the initial estimates are any indication, the future is looking very bright.


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Image from Flickr user mendhak

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