Oil Prices May Reach $5.00 Per Gallon

As the gas prices are always increasing, so are the public complaints. Many people have argued that it is too high and we need alternatives. Last November, gas prices were very low, close to only $3.00. Now we’re up to about $3.40 per gallon and expected to be at $5.00 by the end of the month. So what’s the deal?

Iran recently cut off oil supply to both the British and French suppliers, the same suppliers we get our oil from. Because we have less supply, the prices had to increase. Now Britain and France have to find alternative sources for crude oil.

Why did Iran do this? Just to tick the Americans off. In all seriousness, they are deciding to be immature because the European Union imposed sanctions on Iran’s crucial fuel exports. That includes a freeze of the country’s central bank assets and an oil embargo set to begin in July.

Although the price of a barrel of oil rose from $96 earlier this month up to almost $120, it’s not because of the decreased supply. Mostly it is because of concerns that the tensions between Iran and the United States and European nations will escalate. And yet, it is still possible that we will see oil prices increase over the next 12 to 24 months.

However, it could be possible that their plan isn’t going to have any effect on the United States. First of all, our United States’ refineries are very good at what they do. With the oil they put in, they get plenty more gasoline out of it. So much gasoline, in fact, that we actually export our excess gasoline from the United States to other countries. So a way we could have more available gas is to stop exporting our extra gasoline and keep it for the Americans.

Also, the British and French suppliers have slowly but surely been straying away from Iran’s oil supply. They have been needing less and less oil from Iran and therefore aren’t as dependent on Iran for oil as it may seem. They have been finding alternate sources already so the fact that the Iran oil supply was cut off, doesn’t create as much of a blow to anyone. In fact, this would actually be bad for Iran. Now they don’t have someone buying up their oil which is making them not take in as much revenue.

Whether the oil cut off was going to have a large effect or not on the United States was going to be determined by the DOW. The DOW was actually positive and didn’t take a hit at all from the cut off, showing that the United States people are still continuing to trust the market which is a very good sign.

Now although the oil dilemma may just have a chance of blowing over, it still doesn’t cover up the fact of how we are just so dependent upon gasoline. The reason we aren’t getting great alternatives for fuel in our vehicles is because no one wants to buy them! If we are still willing to pay the price of gas, no one is going to care to make alternatives. As soon as we can put our foot down and say that enough is enough, then we can start changing and become less dependable upon gasoline and oil.