It’s tempting to personify gas prices and pretend they are controlled by some deity that accepts sacrifices in exchange for $2.10/gallon.
The reality is that oil prices are controlled, and not by a perfectly competitive market. The Organization of Petroleum Exporting Countries, or OPEC, is a cartel composed of 13 countries, including big players in the Middle East and South America, which historically has controlled the global oil market.
A cartel? Like the Mexican drug cartels?
Well, not quite. A cartel is actually an economic term referring to a group of suppliers who fix high prices and restrict competition for a certain good or service. It helps when you have the whole world dependent on you. Don’t worry, nobody else thinks it’s fair either, but unfortunately oil isn’t found universally. Accordingly, cartels are super illegal in the U.S.
Like consumers in the fashion industry, we are dependent on the decisions made above us at major fashion magazines. When a mogul like Vogue’s Anna Wintour decides she wants fur to come back, fur comes back. The floral patterns trend? She decided to make that happen years ago. The oil embargo in 1979 and energy crisis? OPEC made that happen, too.
These fashion editors are too powerful for any little magazine to make an impact. The world is demanding their advice, so they have complete control over what is supplied. Their word goes.
So no, shoulder pads are not coming back this season. (I hope.)
There’s been a lot of political talk about weaning the U.S. off our dependence on foreign oil, inciting debate about the best course of action. Is oil money indirectly funding terrorist groups in the Middle East? Why not increase our domestic oil production by drilling more in Alaska and Texas? Shouldn’t we focus instead on sustainable practices to reduce the demand for oil?
But since 2008, the U.S. has actually increased oil and natural gas production, and thanks to technology improvements, we’re killing the game. Namely, OPEC.
Likewise, blogging is on the rise. The future of print publications is looking grim. Fashion magazines still have an online presence, but the only thing differentiating them from a blog is prestige.
American oil and natural gas are flooding the market, and OPEC has finally felt the effect. It’s basic supply and demand. There’s a new powerhouse on the market that’s forcing global prices down. There’s too much supply and not enough demand, so OPEC has to lower prices to still sell.
And huzzah! The market wins! The invisible hand strikes back!
It’s like if all the fashion bloggers of the Internet decided to stick it to Anna Wintour and make shoulder pads so cool again that Vogue couldn’t ignore it, almost like the recent hipster trend.
Non-conformity is cool, OK Anna?
The moral of the story is don’t underestimate the future extent of any current power. All it takes is a little technology to overthrow an arrogant ruler. Everyone loves a dark horse.
Reach the reporter at enichol3@asu.edu or follow @LizNichols4 on Twitter.
Like The State Press on Facebook and follow @statepress on Twitter.
