The Oil Problem that Could Make Prices Skyrocket in a Few Weeks



· 4 min read

It is no surprise that going to the store with $100, can't get you the same things that it could a couple months ago.

But what if I told you that there is a storm on the horizon? Something that could drive up the prices that you are paying even more. And it's not only going to happen in Belize.

The entire world is about to get shocked by the price increases that's about to hit.

But where is the Storm Coming From?


Before we do that, allow me to quickly introduce you to OPEC. The dude that's responsible for what's about to come.

The Organization of Petroleum Exporting Countries (OPEC) is  made up of 13 countries.  They are the Masters of Oil.

They control the distribution of petroleum though-out the world. They set prices, and ensure stability of the industry.

These countries are some of the largest petroleum exporters in the world. Together they account for 30% of the oil supply. They include members such as Saudi Arabia, Venezuela, Iraq and Russia,

The founding members saw the need to protect the rights of those investing in the crude oil industry. Their goal is to stabilize the production and distribution of petroleum.

They do this to secure fair and stable prices for petroleum producers. They focus on having an efficient and regular supply of petroleum.  They also aim at ensuring a fair return on capital to those investing in the industry.

What does all that fancy talk mean?

They control the petroleum. They decide how much is produced, who buys it, and how much they pay for it. They do this to make sure they don't lose.

What did OPEC do?

About 3 months ago a barrel of oil cost $120 USD. Today, it has fallen by roughly $40 USD, to about $80 a barrel.

Obviously, OPEC wouldn't be happy about this. Because even though it means cheaper prices for me and you, it means less money in their pockets.

So in August, they had a meeting. At this meeting, they decided to cut the global supply of crude oil by 2% or 2 million barrels of oil per day.

This is to take effect in November. Meaning that slowly, as the supply of oil decreases, it will start to trickle down to consumers like me and you.

What could be the result?

Due to basic economic principles of supply and demand. The less supply of something that is available the higher prices rise. This is especially true if demand doesn't decrease or rise.

Global travel is just starting to pick up again. Countries are trying to boost their economy to pre-pandemic levels. We could possibly see a rise in travel and demand for oil in the months to come.

People are back to traveling to work, and trying to make up for the years lost to covid. So an increase in travel there too.

China is opening up, production is going back to normal, and things need to get shipped out.

So it's safe to say that oil demand will not be decreasing although supply is decreasing.

So how does this affect prices?

See oil basically runs our world. We need it to produce goods. We need it for farming. We need it to drive to work. We need it to produce electricity.

If the prices of oil go back up to previous high levels, it means disaster for our income.

Since we already saw that we need oil to run our world, it means we will need to pay more. We need to pay more to produce things. We need to pay more to drive to work. We need to pay more to ship products.

The already high prices that we are enduring could skyrocket some more.

Are you ready for that?

The Challenge

This week, I challenge you to take a look at your financial situation. If you don't already have a budget. Make one. So that you can know where you are spending your money.

Something as simple as this can help to prepare you to navigate the storm that's about to come.

What's another step you could take to prepare for this? Comment below and let us know.

Disclaimer: Not Financial Advice
None of the content brought to you on the Giggedbz Hook Mi Up Blog page is intended to be financial advice. We provide content for educational and entertainment purposes only. You should consult a financial professional for advice.

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