Is There a Viable Solution to Our OPEC Dilemma?

Gasoline prices are still over $3 per gallon. Whenever OPEC (Organization of the Petroleum Exporting Countries) decides to increase the price of oil — which now ranges in the upper $60s to $70 a barrel — OPEC’s price becomes the world’s price and non-OPEC nations adopt the OPEC price as theirs.

A major factor in determining the profits of oil producers is the cost of drilling wells and pumping oil. Petroleum that is closest to the surface — such as Mideast oil, particularly Saudi Arabian oil — is cheapest to extract. Among the highest cost per barrel is the offshore oil extracted from the North Sea by Great Britain and Norway. Yet, all oil-producing nations use the OPEC price.

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