Turmoil is cutting a wide swath across the Middle East. Israel has been battling Hamas in the Gaza Strip. Libya continues to be in the grip of Post-Qaddafi chaos. A maniacal group of fanatics has seized large portions of Syria and Iraq, declared it a Caliphate and is killing people who are not Muslim or will not convert. Almost lost among this turmoil is the continuing effort of Iran to develop nuclear weapons while its leaders still call for the destruction of Israel. Meanwhile, Russia and its neighbor Ukraine apparent to be playing an increasingly deadly game of military chicken.
All this discord is happening in places where a lot of the oil this country consumes was produced. So the sort of conflict in those places we are seeing would have the cost of oil and natural gas skyrocketing. As anyone who pays attention to commodity markets — or the price at gasoline pumps, for that matter — knows, that isn’t happening. The price of a barrel of the U.S. benchmark crude, West Texas Intermediate, is trading well below $100 a barrel.
Part of this negative pressure on energy prices is the result of decreased demand caused by a number of factors. Still, the revolution in domestic oil and gas production in recent years has helped this nation achieve the reduced dependence on foreign energy sources that our elected leaders have preached for decades. This is all the more amazing given the large number of “experts” who assured us that a large-scale increase in U.S. energy production wasn’t possible. So which way to the victory parade?