News

After OPEC's announcement that they were going to essentially force gasoline prices back up after the drops they have been having, Saudi Arabia (the most powerful member of the group) pulled out of the organization.

Quote

Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.

As the world's largest crude exporter, the kingdom in the desert took its ball and went home.

As the Saudis left the building the message was shockingly clear. According to The New York Times, “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate said. “We will see what the market requires and we will not leave a customer without oil."

Linky.

This is huge for a couple of reasons. Not only does the announcement show that gas prices weren't being subsidized to garner support for the November elections like many thought, but it also means that the group that held a stranglehold over oil production since the 1970s may be done for.

I do wonder, however, if there is more to this than it seems.