Unless you work in the petroleum industry low gas prices are a good thing. Reduced transportation costs put extra money in the pockets of working families, making it easier to pay bills, buy food and just enjoy life in general. The cost of crude oil today is less than half of what it was in 2014, and as long as per-barrel prices stay below $50 gas will remain cheap.
From the standpoint of our political leaders and their bureaucratic minions this plunge in oil prices has come at a most convenient time. It has caused immense damage to the economies of Russia, Iran and Venezuela, three countries designated as “rogue nations” because of their refusal to follow the dictates of the United States.
To some extent oil wealth has provided these states with the financial capital to pursue an independent path of development, putting them outside the reach of the United States and the neoliberal economic agenda it promotes. This is the real reason why the U.S. government keeps badmouthing Russia, Iran and to a lesser extent Venezuela, accusing them of horrible crimes and eternally bad intentions.
In the past Saudi Arabia has always used its influence in OPEC to cut production when oil prices drop too low. But this time they have refused to intervene. The Saudis are promising to keep production steady no matter how low oil prices drop – and no matter how much money they lose in the process.
The Saudis claim to be concerned about losing market share at a time when global oil production is up. But many observers believe the Saudis are conspiring with the Americans to inflict punishment on Russia, Iran and Venezuela.
Reportedly, a deal was struck during a September 2014 meeting between U.S. Secretary of State John Kerry and Saudi leader King Abdullah (now deceased) to keep the prices of oil artificially low, in order to exact punishment against and/or achieve leverage over Russia and Iran in particular. If true this would explain the Saudi decision to pursue a “market share” strategy that has so far cost them tens of billions of dollars in lost revenue.
From the standpoint of the average American consumer low gas prices are welcome. But if geopolitical strategies underlie them, it could set off a dangerous game of tit-for-tat that might eventually lead to (even more) war in Eastern Europe or the Middle East. And since one of the powers we’ve chosen to demonize has a massive stockpile of thermonuclear weapons targeted directly at American cities, that is not a possibility we can afford to take lightly.