Andrew Scott Cooper says that relief you feel at the gas pump is due to the ongoing Saudi-Iranian rivalry:
There’s no doubt that shale has eroded Saudi Arabia’s “swing power” as the world’s largest oil producer. But thanks to their pumping capacity, reserves, and stockpiles, the Saudis are still more than capable of crashing the oil markets — and willing to do so. In September 2014, they did just that, boosting oil production by half a percent (to 9.6 million barrels per day) in markets already brimming with cheap crude and, a few days later, offering increased discounts to major Asian customers; global prices quickly fell nearly 30 percent. As in 1977, the Saudis instigated this flood for political reasons: Whether foreign analysts believe it or not, oil markets remain important venues in the Saudi-Iranian struggle for supremacy over the Persian Gulf.
The last time the Saudis played ball this hard with Tehran, it helped to bring down the Shah. We had — and blew — a similar opportunity against the mullahs in 2009, but it’s becoming clear that the White House blew that opportunity on purpose.
Which has to make you wonder if the Saudis won’t flood the market even longer this time around. It’s obvious we aren’t going to help them deal with Iran, so maybe they’ll keep up enough pressure to do what we won’t.