The gauge on the LP tank behind the shop reads just under a quarter. I called Adams-Columbia Electric Cooperative last week to schedule a fill before deer rifle season opens. My brother-in-law’s house in Stevens Point heats with the same propane I do, and his tank was empty before Thanksgiving. The quote came back at $2.89 a gallon. Two years ago the same quote was under two dollars. The propane truck that rolls down our section-line road has rolled down that road since I was a kid. The company is the same. The truck is newer. The price is not the same.
It’s not the same because oil closed above ninety-six dollars a barrel on Brent, the global benchmark, on Friday, and the price has been running high all year. OPEC+ called its October decision a “hold.” Don’t believe the word. Six consecutive monthly increases, the last one another 188,000 barrels a day in September, just completed the unwinding of the 1.65 million barrels a day of voluntary cuts the cartel agreed to back in 2023. Every one of those increases was billed as a return of supply. Now the cartel pauses. Not because demand softened. Not because OPEC+ suddenly discovered discipline. Because the war is doing the cartel’s job for it.
The Strait of Hormuz — the chokepoint that handles a fifth of the world’s crude — is operating at maybe seventeen million barrels a day, down from twenty million before Trump launched the war against Iran on February 28. Energy Secretary Chris Wright told CNBC more than 17 million barrels a day crossed Hormuz on Monday. That’s three million barrels a day of throughput that has simply vanished — not because OPEC+ cut it, but because the U.S. Navy and Iran’s missile corps are busy settling the bill in the Persian Gulf. The U.S. struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two Navy warships. Trump’s Defense Secretary is quietly extending troop deployments, signaling the conflict will run into next year.
That’s the war side. The cartel side is OPEC+, the group of major oil producers led by Saudi Arabia and including Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman. OPEC+ says it would like to bring more barrels, but the war in Hormuz makes that impossible. A separate tranche of two million barrels a day of cuts from 2022 remains in place through the end of the year. The cartel meets again October 4 to set November production levels — another chance to keep the discipline in place. OPEC+ is also reviewing members’ production capacity to set 2027 output baselines that will dictate future quotas. Supply discipline locked in for years to come, with the war as the reason it has to be.
The cartel and the war machine are running the same play. The war disrupts supply. The cartel says it can’t add supply because of the disruption. The cartel uses the war as cover to maintain supply discipline and keep prices elevated. Through the summer OPEC kept its supply tight through the Hormuz closure and the price climbed with it. Now the cartel has published its demand forecast. It expects oil demand to rise by 580,000 barrels a day this year, down from the 780,000 it expected previously. Next year, the cartel says, demand growth will accelerate to 2.16 million barrels a day. That’s nearly four times the revised figure for this year, on a one-year horizon, in a forecast published the same week the cartel agreed to hold production steady. Other forecasters think the cartel’s numbers are far too optimistic. The math is convenient. The math is the operation.
Here’s the bet on the next chapter. Whoever gets the higher baseline in 2027 gets the right to pump more when — not if — Hormuz reopens. The cartel uses the war as cover to write those baselines low, then watches its members cheat against those low targets to grab share while prices stay firm. The cohesion question analysts keep raising is the wrong question. The cartel doesn’t need cohesion when the war gives it cover.
What it adds up to is the cartel and the war machine keeping oil scarce so the money keeps flowing their way. The cartel gets higher prices per barrel and locked-in supply discipline for 2027. The war keeps roughly three million barrels a day off the global market through a chokepoint that no one can route around. The U.S. taxpayer funds the war. Saudi Arabia, Russia, Kuwait, Algeria, Kazakhstan, and Oman get the scarcity rents. The oil majors who sell both sides — the war and the cartel — get both.
Wendell Berry has a name for this. In The Unsettling of America and the agrarian essays, he wrote about the corporate mind that treats land, water, communities, and people as inputs to be moved through an industrial machine, with the cost exported to the people who live where the extraction happens. The machine is global now, and the extraction is happening in Adams County as sure as it is happening in Houston or Riyadh. Every gallon of propane at $2.89 is a gallon of membership that left the county. Every dollar of diesel I put in the Silverado to drive to Mauston for a part is a dollar of membership that left the county.
I keep a notebook. Twelve years now. The notebook says the ice went out on Petenwell eleven days earlier than the year I started it. The notebook says the deer rut has moved. The notebook says the first mosquito arrives earlier. I don’t have a notebook page that says “the war is keeping my propane at $2.89 a gallon.” I don’t need one. The price is at the gauge. The price is on the receipt. The price is at the pump.
The 1936 Rural Electrification Act wired rural Adams County when the market said rural Adams County wasn’t worth the wire. The co-op that runs the wire is still running it. Mike and Quinn will inherit a county where the wire is still here and the propane costs more every winter, and the question is whether the membership will still be here when they need it.