3 Global Peace Deals That Can Save You $50 a Month
It seems like every time you turn on the news lately, there’s another story about a carrier group venturing into new waters.
We have become accustomed to “talking with guns” which is the main way nations communicate with each other. But behind the scenes something else is going on. Politicians are actually sitting down at the tables in Geneva and beyond, and if they succeed, your wallet will be helped first.
Oil is an emotional commodity. It doesn’t just account for how much fuel we use; it reacts to how much the market fears that supply may stop tomorrow.
Currently, three specific sets of negotiations act as a pressure valve for energy costs. If these deals are in place, the average driver could see a significant reduction in their monthly fuel bill.
Here’s a look at the important conversations and why you should care about them more than just bringing peace to the world.
1. Iran nuclear talks in Geneva
The US and Iran are back at it for a second round of talks. Although there is a lot of military posturing going on behind the scenes, the West’s ultimate goal is stability. If an agreement is reached to reduce sanctions, it is not just about political wins. We are talking about millions of barrels of Iranian oil officially hitting the global market.
When supply increases and the fear premium decreases, the price at the faucet decreases. Analysts have long recognized that national tensions add a hidden tax to every gallon you buy. Clearing that gap is the fastest way to see $3.50 back to $3.00.
2. Arbitration between Russia and Ukraine
The US is currently playing the role of mediator in the peace talks between Russia and Ukraine. This is the big one. Since the conflict began, global energy markets have been in a state of whiplash. Even if you don’t live anywhere near Eastern Europe, instability there has kept world oil prices artificially high.
Effective mediation not only prevents conflict; it restores a sense of predictability to the market. Prediction is the enemy of high prices. If traders aren’t betting on the pipeline blowing next Tuesday, they don’t need to bet on the hedge by raising costs today.
See “5 Ways Global Events Affect Your Investments.”
3. Regional stability in the Middle East
US air carriers aren’t just for show. It is about preventing a wider regional conflict that could choke the Strait of Hormuz. About 20 percent of the world’s oil passes through that body of water.
While the carriers provide the muscle, the bureaucratic negotiations that take place in the shadow of those ships are what actually prevent the complete closure of the shipping lanes. Every day that goes by without a major hike in the Middle East is a day when fuel prices remain stable in reality instead of rising in speculation.
How much can you really save?
It’s not just a few cents here and there. According to data from the US Energy Information Administration, energy costs are the most volatile part of the household budget. If these three lobbying efforts are successful in lowering the price of gasoline by just 50 cents a gallon, a family with two cars and an average commute will easily save $50 to $60 a month.
That’s money that doesn’t go into the gas tank; it’s money that can go into your savings account or help pay off that high-interest credit card. You don’t have to be a foreign policy expert to appreciate the value of a peaceful world – you only have to look at your bank statement.
Check out “8 Smart Ways to Save Money at the Gas Pump.”
