So why hasn’t OPEC done more to lower prices, which have risen by 50% since the start of the year? The answer is that, in the short term at least, the cartel seems to have lost control over the market. With the exception of Saudi Arabia, its producers are pumping as much as they can—and Saudi excess capacity is in heavy crude that is harder to refine into the cleaner fuels demanded by rich countries. OPEC made a great show of raising its members’ combined quotas to 28m barrels per day (bpd) in June. But thanks to rampant cheating, they were already pumping at least that much, and possibly as much as 30m bpd, making OPEC’s promises little more than a carefully staged bit of public relations. (Perils at the pump | Economist.com)
I hope the libertarian cartel is more disciplined.
Why would the OPEC do something to lower the prices? It is their most important economy driver if not the only one. Prices are best decided by the market. For that matter, why doesnt India do something about it? Why hasnt India done anything on Iranian pipeline as yet? Why hasnt the US done anything to reduce its consumption or revert to other sources of energy, given its role as a moral police as well as a global super police? Charity Begins At Home.