The Financial Times is reporting that OPEC members, led by Saudi Arabia, will earn more than $1 trillion in net oil revenues this year, which is a record. Depite weak economic growth around the globe, the price of Brent crude oil continues to flirt with an all-time high price level.
In 2012, the average price for a barrel of Brent crude oil was $111.50. Some analysts expect the average price per barrel to increase even higher in 2013. According to the IMF, Saudi Arabia needs oil prices to average at, or above, $80 per barrel in order to balance their budget. Just ten years ago, the Saudis could balance their budgets when oil averaged $25 per barrel.
OPEC’s record-breaking oil revenues for 2012 represent a 400% increase in just one decade. (In 2002, OPEC reported revenues of around $200 billion.)
This data indicates that America must break its addiction to foreign oil sooner rather than later. It is becoming more paramount than ever before.