President Trump blasted the OPEC oil cartel on Friday, accusing the group on Twitter of “artificially” raising oil prices and declaring that it “will not be accepted!”
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!— Donald J. Trump (@realDonaldTrump) April 20, 2018
OPEC, the Organization of the Petroleum Exporting Countries, is a group of 14 nations that seeks to coordinate oil production and greatly influence oil prices. U.S. ally Saudi Arabia remains OPEC’s most powerful member — with enough production capacity to manipulate global supplies. Unity within OPEC was strained in recent years, as some members such as Iran have pumped greater supply into the market.
Since early in 2017, however, OPEC has coordinated with Russia, another oil-exporting country that is not an OPEC member, to try to regulate global supplies.
The deal came after a sharp decrease in energy prices from 2014 to 2016, hurting the member nations whose economies depend on oil production. Since Russia and OPEC increased coordination, prices have risen.
OPEC was founded in 1960 and has influenced global oil prices ever since. Prices are driven by many causes OPEC cannot control, including by global oil demand that typically increases in times of strong global economic growth.
In the United States, demand is expected to increase in coming months, as people drive more in the spring and summer.
The price of oil directly affects the price of gasoline, with consequences for U.S. consumers. U.S. oil producers have complained when prices fall too low, cutting into profit margins on expensive operations such as fracking.
The current national average retail price for a regular gallon of gasoline is $2.75, according to data collected by AAA. A year ago at this time, it was $2.42.
In February, 2017, Trump’s first full month in office, retail gas prices average $2.30 per gallon, according to the U.S. Energy Information Administration.
Gas prices hit record levels a decade ago, reaching a national average of more than $4 in July of 2008, before collapsing as a global recession drove down demand.
Trump’s comments on OPEC came amid a flurry of other early morning tweets, including a fresh shot at fired FBI director James B. Comey and another saying he is excited to be the commencement speaker at the U.S. Naval Academy next month.