gilead23
A couple of points:
1) Oil is a virtual necessity in the world industrial economy; many other consumer items are not; oil is the lifeblood of the transportation system..
2)Oil prices were stable for 100 years before 1973 at well under $5 a barrel. From 1958-70 the average price was $3. The oil companies were still hugely profitable because it cost them less than a dollar to produce. Big changes began with OPEC which was already renegotiating contracts and raising prices before the 1973 Arab oil embargo.
3) Never fear for the oil companies. They have always been hugely profitable...even at $2 a barrel.
Their costs have not gone up recently, but the price of the product has exploded. If the price goes down, they just pump less oil and pump from the wells with the cheapest costs, like in Arabia where it costs $1 a barrel to produce.
I'm not sure what you mean by "populist double standard" I was just stating the facts, which come from the oil companies.
There is such a thing as price gouging...if there's a shortage of something, and merchants suddenly hike prices 100% or more, this kind of activity is illegal in some areas and generally viewed, at the very least, as unethical, like Halliburton overcharging for gas it transports from Kuwait to Iraq.
I recall when drinking water was needed in Florida before and after hurricanes and several people were investigated for price gouging, but all they did was charge what they could get because demand exceeded supply. Fact is, they didn't need to quadruple prices to make a nice profit.
Neither do the oil companies need to charge $50 a barrel to survive. Somehow they made do on $3 a barrel most of their existence. What does that tell you about current profits?
AI
