The High Price of Oil
BY JR NYQUIST
The price of oil has been rising despite the sluggish economy. Today gasoline prices have reached an all-time winter high. According to the U.S. Energy Information Administration, the average retail price for regular gasoline was $3.38 per gallon in January and the average retail price for diesel was $3.83 per gallon. In late February the average price for regular gasoline rose to $3.68 per gallon (see the AAA’s Daily Fuel Gauge Report). As of this writing, according to oil-price.net the price of WTI Crude oil was $109.62, and the price of Brent Crude oil was $125.44.
As if to explain the high price, oil-price.net carried an article by Tobias Vanderbruck titled Iran, Oil and the Strait of Hormuz. It has been suggested that troubles in (or with) oil-producing countries may be responsible for high oil prices. For example, the present crisis between Iran and the West has led the Islamic Republic to threaten the oil lifeline of the developed world which can be choked off at the Strait of Hormuz. This is where 20 percent of the world’s oil must pass.
Upward pressure on the price of oil may be found, as well, in the growing demand of rapidly developing countries like India and China. In such countries oil demand is growing. As people become more prosperous they acquire automobiles. They take trips in airliners. As industry grows, fuel is needed for trucks and factories.