Just two countries – Russia and Saudi Arabia. These two longtime adversaries have surprisingly come together and bonded to cause an increase in oil and gasoline prices.
They are two of the most prominent oil producers globally, and they’ve cooperated in cutting significant production and shrunk excess supply hence keeping prices on the rise.
The surprising alliance between Russia and Saudi Arabia is a key reason U.S. motorists have paid 18% more for gas in the last year.
“The market perceives that Saudi Arabia and Russia are having a strong and fruitful collaboration to keep the price of oil high and rising,” said Amy Myers Jaffe, a senior fellow at the Council on Foreign Relations.
Previous attempts had failed. In December 2016, an agreement between Saudi Arabia and OPEC agreed to cut production by 1.8 million barrels per day. The whole goal of the group is to reduce excess supply in the marketplace.
The White House has also noticed the rising energy prices. President Donald Trump tweeted that OPEC was ‘artificially’ keeping the costs high.
“Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”
Presidents have historically disliked rising energy prices because of the impact it has on the growth of the economy.
The average price of $2.81 a gallon is rising, but there’s still plenty of room to spike higher based on historical data.