OPEC and Auto Transport – How Rising Oil Prices May Affect Your Shipment
Article Overview
OPEC and Auto Transport – How Rising Oil Prices May Affect Your Shipment
OPEC (the Organization of the Petroleum Exporting Countries) has reached a deal to limit crude oil production yesterday, and gas prices in some areas are already rising. Now, people are wondering how OPEC and auto transport prices are linked.
The organization will be cutting production down to 32.5 million barrels per day (mb/d). This is a cut of about 1.2 mb/d. The International Energy Agency estimates that there was a 300,000 barrels per day surplus in the third quarter of 2016. OPEC, naturally, wants to cut that down. Surpluses lead to lower oil prices, which hurts OPEC’s bottom line.
This is the first production cut in eight years, and is being hailed as a “positive step.” But what does this mean for auto transportation prices?
How OPEC and auto transport prices are linked
To start, oil prices have been dropping over the last two years, down from their highs in 2014. This has been a good thing for American motorists and, especially, American auto shipping companies. Prices to ship a car have dropped a bit over the past eighteen months, but could they be coming back up?
It’s certainly a possibility.
Auto transport companies toe a fine profit line, especially car transport carriers. They have to factor in diesel prices, fuel consumption and efficiency, route length and a host of other things when determining how much it will cost to ship a single vehicle.
With oil prices low, auto shippers have seen a drop in their overhead costs, which has led to more competition, particularly along popular routes.
However, with the global oil surplus now being halted by OPEC (in theory, anyway), there’s concern that major auto shipping markets are going to be hit hard.
Prices are already going up in Central Florida, which has long been a bastion of car shipping customers. This will likely lead to higher auto shipping prices for routes through those areas.
The future of OPEC and auto transport prices
OPEC will need to revisit this decision when they meet again in June. Right now, there’s no guarantee that they’ll actually be able to cut production the way they want.
Iff prices in Central Florida are any indication, car shipping will see price hikes in other major areas as well. Areas that are known oil producers, like Texas and California, may be able to offset some of the rising oil prices. Others, however, may not be so lucky.
What does the future hold? We don’t know. Right now, the decision is less than 24 hours old and has yet to be implemented. But the oil markets are rising, it seems, which indicates that there’s confidence in the decision, particularly among oil companies.
If you are shipping a car and waiting for the right time, it’s probably a good idea to book sooner than later. But regardless, let American Auto Shipping help. Get free quotes to ship your car via our free online quote form. You can also call us any time at 800-930-7417 to get assistance from a live agent. We get you quotes from some of the best auto transport companies in the industry. And while we can’t say for sure what the future of OPEC and auto transport is going to be, we know that auto transport services will still be in demand. Give us a call, or fill out our free form, and let us help you get your car shipped today.
Since 2007 Dave has written all the content and blogs for American Auto Shipping and during this time added the duties of customer support and transport logistics.
He currently resides in Washington with his three kids and their mom and cat. A fan of Marvel movies and good stories, when not shipping cars Dave can be found working on his novel, enjoying a good book or playing some tournament HALO.
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