Why Are Oil Prices So High? Don't Blame OPEC

Those were the days: The Economist's March 6, 1999 cover.

The March 6, 1999 Economist cover featured oilmen battling a gushing oil hydrant under the fat headline, “Drowning in oil.” It was a crisis of a different order back then, the kind of crisis the rich world didn't have to worry about. "Cheap oil could cause instability as well as poverty," the magazine noted. "As a result of last year's low prices, the Mexican government has revised its budget three times and increased borrowing," while many other oil-producing countries were ill-placed to deal with low prices. Corruption and bad government could be the result. But the magazine also warned that “just as oil’s scarcity seemed a fact of life in the 1970s, its abundant flow might be too easily taken for granted today.”

It was. The price of oil jumped by almost $11 last week to a new high of $138 per barrel, compared with $10 a barrel in 1999. What's the cause? This time, don't blame OPEC or the Middle East, at least not much.

Here's a cause-by-cause explanation of high oil prices.