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Luckily for me, I only have to invoke the use of my beautiful 1997 Honda Accord for an occasional trip to the
liquorgrocery store, or to my home so my parents can confirm I am indeed alive. I don’t fill up my tank very often, but I can’t ignore the numbers posted outside the gas station my favorite fountain drinks flow from, or the continuous cries from broke friends who can’t afford this ridiculous petrol price. You can claim government conspiracy or seasonal upswing, but here are a just a few causes of the recent price hike.
Our cities have been planned in ways to maximize the number of people who can live the American dream of owning homes with endless yards and room to grow. Suburban sprawl has forced and encouraged all of us to want and need our own personal vehicles. The United States is the top oil consuming nation by far, and we refuse to let our number one status down. While it may be ingrained in our cultural identity to lust after oil, we only produce about thirty-six percent of what we consume, forcing us to rely on the prices that exporters set.
Recent sanctions against Iran, designed to punish the state for its uranium enrichment practices, have caused not only extreme hostilities from Iranians, but also a huge decrease in oil exports. This lack of supply has been estimated to tack on an extra twenty-five cents per gallon at the tank.
Syria, an ally of Iran, is in serious trouble. The UN, NATO and other multilateral bodies have been sitting cautiously hands-off this uprising until just recently, despite the horrifying violence that has been occurring for over thirteen months. The lack of response from the Western world is likely due in part to oil relations, as even speculation over further conflict and violence causes gas prices to rise.
High oil prices both drag down our wallets and complicate the international political economy. As oil producers take in record high profits, we again face a period of petrodollar recycling which occurs when oil exporters make more money than they know what to do with. Instead of spending it on their own economies, they reinvest the dollars into the oil importing countries. While more petrodollars are now being recycled into China, hundreds of billions are pumped back into the US via short-term yield bonds. This can be both good, helping developing economies and strengthening the dollar, and bad, creating tricky relationships when public debt in the developed world is financed by the often corrupt regimes that manage the petrodollars. As oil exporting states own more and more of our balance deficit and violent unrest unfolds within their borders, our relations with them, as well as our dependence on oil, will surely be tested in the near future.