Why Are Gas Prices Up? These Frenemies Get Some Of The Blame : NPR - 0 views
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Russia and Saudi Arabia have been longtime adversaries over geopolitics and military operations in the Middle East. Now, they've formed a surprising bond that is reshaping global oil markets. As two of the world's largest oil producers, they have engineered significant production cuts to mop up an oil glut that had been keeping energy prices low for years. The unexpected alliance is one of the reasons motorists in the U.S. have seen prices at the pump climb 18 percent over the past year.
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"What is surprising is they've managed to put aside a history of political distance or even political animosity to find common cause around economics," said Meghan O'Sullivan, a professor of international affairs at Harvard's Kennedy School. "It's one of the most interesting geopolitical developments to happen in the last few years." Saudi Arabia and Russia putting political differences aside for the goal of financial gain is one thing. Making it work in the global oil market is another. Joint efforts to control oil prices have floundered in recent decades. Analysts say that OPEC's ability to coordinate and manipulate prices has been overwhelmed by cheating among members and by the bounty of shale oil produced in the United States. Russia is not an OPEC member. But in December 2016, it made a de
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It's unclear what leverage, if any, the White House has to undo the Saudi-Russia agreement. Gasoline prices are rising, never a happy fact for a president, though at an average of $2.81 a gallon they're still moderate by historical standards. But if gas blows past $3 and heads toward $4 a gallon, it could become a hot issue in the midterm elections.