If we only get 13% of our oil from OPEC countries, why is it costing around $200 / barrel?

Question

The major news channels say the cost of a barrel of oil is around $200. Does this mean that Americans are paying that much for oil produced here in the United States? Canada? Mexico?

Answer 1

The prices of a barrel have been going down in recent weeks but the price at the pump went back up. Gas prices are up almost 400% from ten years ago and the oil companies are seeing record profits.

To be frank, it's a mix of greedy oil CEOs and the media hyping oil prices so much that the oil companies can do that. The more we say "Oil is going to be five dollars a gallon next year" the more likely it is to be true b/c the media gets the consumer to accept the idea. It's the same with our economy. We're in a downward slope but it is not by any means a recession (in the definition of a recession) but the media is scaring people out of spending money and making it worse.

So yes, simply: greed.

Answer 2

Thats because the US is very oil dependent. People depend on vehicles, and delivaries depend on trucks mostly running on gasoline. Since the US is dependent, and oil companies know this, they are able to charge more because they know people will be willing to pay for it. This is the elasticity of demand. The American demand for oil is fairly inelastic, which means a change in price, such as increased prices will only lead to increased revenue for oil companies. Furthermore, booming countries like China receive subsidizes from the government. They pay about 30% less for oil in China when compared dollar for dollar and taking the real price.

basically, it is because of the ever increasing demand and reliance on oil, what happens if oil becomes $400 per barrel in a week? People will continue to use oil, food needs to be delivered by trucks using gas, people need to get to work. All that will happen is the demand going slightly down.

Answer 3

yes, all oil goes through the commodities exchange. it sucks for us

Answer 4

Because oil is sold in the international market. It doesnt matter where it is produced, it cost the same everywhere because it can be shipped everywhere.

Some places enjoy cheap gas, like venezuela, but only because the government forbids the exportation of gas. Without the ban i could buy a 12 cent gallon of gas in Venezuela and sell it for 4 dollars in the US.