Russian Oil, OPEC’s Power, Prices At the Pump

History of Petroleum

Just in time for that Thanksgiving Dinner drive to our friends and families, we all received some good news: gas prices decreased. But then, the week after Thanksgiving, oil prices began to increase, which, I suppose, means that our prices at the pump would increase as a result.

But, why do changes in the price of oil impact gasoline prices so quickly? Shouldn’t the impact of far-away oil supply constraints take longer to change our gas prices?

The history of oil is the grand story of geopolitics. Not too long ago, oil production and sales were controlled by the West — specifically, it was the “Seven Sisters” who ruled the world (7 oil companies). But then, USSR (the Soviets) opened their own oil spigots and altered world markets. How the West reacted to Russia’s entry into the oil market was crude (pun intended) and arrogant. And how oil-producing developing nations reacted to the West (to the Seven Sisters), was quite rational and even predictable.

To better learn this fascinating history, I spoke with Ms. Jacqueline L. Weaver, a Professor of Law at the University of Houston Law Center. Her teaching and research interests cover oil and gas law, energy law and policy, international petroleum, and environmental and natural resources law. She has lectured…