I'm not talking about the current spike, which I agree is determined by political conditions and the cartel. But prices in general will tend to gravitate to whatever the market will support, it has nothing to do with the cost of production. It never does, unless the world is awash with oil. The big oil producers collude and try to control supply to keep the price maximized, but individual producers cheat and try to gain personal short term gains.

My point is that we will never pay the price of production + a reasonable profit for oil as long as there is a perceived or manufactured shortage. There may be 30 cent a gallon gas in Saudi, but you'll never see anything like that here just because we make a big strike in the Gulf of Mexico. If we develop a huge prospect here, we'll still wind up paying just a bit less than the rest of the world is.