The Real Reason for Oil Price Hikes?

I hope the following isn't to boring or heavy an issue.

In an AP story, OPEC’s president “Algerian Energy Minister Chakib Khelil notes that OPEC controls only 40 percent of world oil production, and says the high prices do not reflect market conditions but rather other factors linked to the weakening dollar, market speculation and the U.S. subprime mortgage market turmoil.”

As much as I dislike OPEC, this explanation makes more sense to me than all the others. My skepticism is base on the dramatic price hikes for energy and food over such a short period of time. Wouldn’t we see a slower increase in prices if shortages and demand were really at fault? This is a one year phenomenon. Gas increased by dollar over the last year alone. All of this surprisingly coincides with the subprime mortgage meltdown.

But even OPEC should admit to the elephant in the room: Middle East tensions caused by U.S. saber rattling and our wars in Iraq and Afghanistan.

And it’s not just gasoline, in Saudi Arabia; they’re using 30 percent more of their natural resources for themselves to keep their grids running at full power. In a strange way, Iran might actually have a legitimate reason after all for building a nuke power plant, besides making a nuclear weapon.

And since oil has so much to do with energy and food production, alternative energy programs may have lessened the impact of these price swings. But instead of lessening our dependence, the large petroleum industries kept us busy debating global warming. While we were forced to argue about the possible economic cost of confronting global warming, we might have saved ourselves a lot of grief investing in our future.

So, how much have we saved by doing nothing and allowing the status qua and the debates to continue?