The Oil Drum

'In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33 cents. Venezuelans pay less than a quarter.

These absurdly low prices are a direct result of massive government subsidies.

While these numbers are not adjusted for cost of living, it's fair to say that drivers in those countries are getting a good deal.

But it's straining government budgets. More importantly, it's not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else.'

http://money.cnn.com/2007/05/04/news/economy/gas_demand/index.htm?cnn=ye...

Especially note the 'not allowing the free market to do its job' - if Saudi Arabia or Iran or Venezuela decide to sell themselves their own oil at their own price (so to speak), this is unfair to Americans, as it stops the free market from working.

I believe the Iraqis, however, have made major strides in allowing the magic of the free market to work for them. Strangely, the article didn't note this success in lowering demand by raising prices in an oil producing country.

I may add, the article provides some basis to see the export land model in operation - not that it actually mentions this point, except to more or less suggest that an oil producing country should not be allowed to escape the demands of the free market by increasing their own consumption - after all, merely because it theirs doesn't mean they should be allowed to keep it selfishly for themselves. After all, Iraq doesn't.