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Gas prices have lowered but actions overseas could soon change that

A vote by OPEC+ to decrease production could increase prices soon. Could the White House force them to change their mind?
Biden Oil Moratorium
Posted at 3:00 AM, Oct 24, 2022
and last updated 2022-10-24 09:26:41-04

WASHINGTON — Gas prices have been on a rollercoaster ride around the United States this year.

After record-high prices over the summer, this fall, we have seen prices decline in most countries.

However, economists are bracing for another hike soon following a decision by Saudi Arabia and other countries to reduce how much oil they produce each day.

CHANGING TRENDS

To understand the current price at the pump, it helps to look back a few months.

According to the Energy Information Administration, in January, the price was $3.32/gallon.

In April, it was $4.11/gallon.

July was rough at $4.56/gallon.

However, then some relief came.

Last month, it averaged $3.70 nationwide.

Prices have fallen in most places across the United States throughout October as well.

OPEC MEETING

Then the Organization of the Petroleum Exporting Countries (OPEC) decided to meet.

OPEC and OPEC plus represent over 20 oil-exporting countries around the world.

The U.S. is not a member.

Collectively, though, they control about 50% of all oil production around the globe.

In a significant blow to Americans who want lower prices, OPEC+ voted earlier this month to cut oil production by 2 million barrels daily.

That matters because the world consumes around 100 million barrels every 24 hours.

Taking 2 million out is expected to push prices up since oil prices are based on the global market.

CAN D.C. DO ANYTHING?

"The choices made by other countries are affecting the price of gas here at home," President Biden said last week from the White House.

OPEC's decision is one reason President Biden announced last week he is releasing around 15 million barrels from our country's emergency petroleum reserve.

While that is a lot, it only makes up about two weeks' worth of production that is expected to be lost.

That's why some in Washington are asking if anything can be done to penalize Saudi Arabia, a prominent leader within OPEC that voted to cut production, to change its mind.

After all, one reason President Biden went to Saudi Arabia earlier this year was to prevent decisions like this.

However, any penalty or action against Saudi Arabia is tricky.

There is growing bipartisan support on Capitol Hill for a bill known as NOPEC, allowing the Justice Department to sue Saudi Arabia and other countries for unfair energy practices.

A vote could happen after the midterms.

Other lawmakers want the U.S. to block weapons and military sales to Saudi Arabia immediately.

Some meetings in the Gulf between the United States and Saudi Arabia have already been canceled.

However, that move is more controversial, with Republican Senator Jodi Ernst of Iowa writing to the White House recently that cutting such ties "aids our adversaries" such as Iran.

While Saudi Arabia may be going against the White House on energy issues right now, they are often aligned regarding keeping peace in the Middle East.

Is it worth it to completely ostracize Saudi Arabia from the United States?

One thing is clear expect something soon.

President Biden himself has promised "consequences" for Saudi Arabia's actions.

It's just not clear, at this point, if anything will change an expected spike in the coming weeks.