by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
Not that long ago, any instability in the Middle East caused oil prices to soar, and with them, retail gasoline prices. I was thinking about this yesterday when fueling up my car. The pump price, I noticed, was a little lower than it was last week.
In itself that isn’t all that unusual, but this past week sure was — the media talking heads were apoplectic that the U.S. had just started “war with Iran,” while social media was replete with talk of “World War III.”
It was the third week of heightened tensions involving Iran and the United States. Yet retail gasoline prices in Raleigh are a little lower than they were on Dec. 27, when missiles by an Iran-backed militia killed a U.S. contractor and touched off the hostilities (see below) that led to this week’s hysterics.
So why have retail prices been so calm? I think a big reason is that speculators were more informed, circumspect, and less inclined to believe that Iran and the U.S. were truly on the brink of war.
Another reason, however, is thanks to fracking. We are simply not as concerned about Middle East instability creating disruption in the supply of oil here as we used to be.
Notes on the graph:
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