International, Politics

Spending more on gas? Why OPEC may be to blame.

Aug 31, 2021 at 07:24 AM CDT

opec gas spending

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The Organization of the Petroleum Exporting Companies (OPEC) and its allies are expected to increase oil production. The move will help stabilize gas prices and spending at the pump.

Tags: Joe Biden, Pandemic

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JIMMIE JOHNSON: IT’S NORMAL FOR GAS PRICES AT THE PUMP TO SURGE HEADING INTO A HOLIDAY WEEKEND, BUT THAT’S NOT THE ONLY ISSUE THIS TIME AROUND.

SOME BLAME PRESIDENT JOE BIDEN AND THE ECONOMY, WHILE OTHERS POINT TO OPEC.

SO, WHAT IS OPEC AND HOW DOES IT IMPACT AMERICAN GAS PRICES? LET ME EXPLAIN.

OPEC STANDS FOR THE ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES.

IT’S AN ORGANIZATION FOUNDED IN 1960 BY FIVE OF THE WORLD’S BIGGEST OIL-PRODUCING AND EXPORTING COUNTRIES.

TODAY, THERE’S A TOTAL OF 13 MEMBER COUNTRIES, AND IT CONTROLS ROUGHLY 40-PERCENT OF THE WORLD’S OIL SUPPLY, ACCORDING TO THE COUNCIL ON FOREIGN RELATIONS.

CALEB: ”You can call it a cartel, it really is a group of countries that rely on production and supply volumes, in order to keep prices stable so they can continue to grow their economies.”

JIMMIE: INVESTOPEDIA EDITOR IN CHIEF CALEB SILVER SAYS THAT’S BEEN THE CASE SINCE ITS INCEPTION. THE U-S IS ONE OF OPEC’S BIGGEST CUSTOMERS, NEXT TO CHINA.

CALEB: “We are a huge consumer of oil and oil products, so when you see gas prices higher in the US asking OPEC to produce more oil, in effect, it’s asking them to put more supply in the market, which would drive prices down. The US is also a producer of oil and gas but not nearly enough that it can rely on just what’s produced here in the US, to fulfill its feats.”

JIMMIE: CALEB SAYS THE BIDEN ADMINISTRATION’S REQUEST TO INCREASE PRODUCTION IS SIMPLY SYMBOLIC. THE U-S NOT A PART OF THE ORGANIZATION AND HAVE NO POWER IN THEIR DECISION-MAKING.

CALEB: “It says we’re doing something about this problem because we know it’s affecting you. We know that gas prices are a big part of inflation right now and they’re taking a bite out of people’s pocketbooks.”

JIMMIE: AT THE PEAK OF THE PANDEMIC, OIL DEMAND BOTTOMED OUT AND PRICES DIPPED.

AS A RESULT, OPEC CUT BACK PRODUCTION BY AS MUCH AS 20 MILLION BARRELS A DAY IN HOPES OF DRIVING PRICES UPWARDS.

NOW THAT YOU KNOW MORE ABOUT OPEC, WHO DO YOU THINK IS TO BLAME FOR RISING GAS PRICES?

LET ME KNOW IN THE COMMENTS BELOW.

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