“When you get into a tight oil market like this, it puts more pricing power in the hands of OPEC,” says Severin Borenstein, codirector of the Energy Institute at the Haas School of Business at the University of California, Berkeley. “They are able to use that to ratchet prices up further. But it’s not so much OPEC as it is Saudi Arabia that’s responsible. It has the most flexibility in how much it produces and an economic interest in reducing output to keep prices up.”
Would Americans spend less per barrel on imported oil – and less on gas at the pump – if the US opened the Gulf of Mexico, Alaska, and other areas to more oil production as oil companies and their political allies argue?
AP Photo/Mary Altaffer
