Why oil costs over $140 per barrel: the failure of leadership

The leaders of the G7 have been howling about high oil prices. They have been to Jeddah to beg OPEC to produce more oil. They have tried to blame speculators for bidding the price up. They do seem to understand that prices are high owing to a growing imbalance between supply and demand at the price they would like to pay. But they have done nothing to try and solve this unfolding crisis apart from fiddle while Rome burns.

The only part of this equation they can control is demand. It is therefore imperative that action is taken to curb demand for oil within the G7 – now!

But no. Rather than show any form of leadership the favored course of action by all is to allow the market, via price, to ration oil supplies between countries and within countries – and then quite amazingly to complain about the high price their common policy has produced.

The Oil Drum: Europe