Oil prices have skyrocketed to their highest level since November 2014. WTI Crude is currently at $79 per barrel, Brent Crude at $81.32, OPEC Basket at $82.60, and Urals at $81.50. This is due to strong demand. Global oil demand was approximately 92 million barrels per day (bpd) in late 2014; now it has grown to nearly 100 million bpd, with crude inventories decreasing to below the five-year average. There are rumors the cost could reach $100 a barrel, and the worries are substantiated. Executive Director of the International Energy Agency Faith Birol has warned that oil prices are “entering the red zone.” There are many different factors here at play. From a security stand point, anything could happen. The Iran-Israel conflict could erupt and the North Korea and United States (U.S.) talks could falter—both likely to increase the cost of crude oil. That being said, oil prices will eventually fall as long as such conflicts do not arise; however, trade wars and sanctions could hurt the amount of discretionary spending consumers are able to sign off on. The cost per barrel has risen more than 20 percent in 2018. Reuters says that this is partially due to trade tensions between the United States and China heating up, but also because looming sanctions on Iran have started to curtail flows of oil from the country. Iran’s economy is becoming tighter, as exports are slowing down. With the remaining U.S. sanctions set to be enacted on November 4, there is reason to fear the decrease in exports will continue. It is often agreed upon that the European Union will slowly pull out of purchasing Iranian crude oil, although it is still unknown whether China and India will follow suit. India has imported approximately 580 thousand barrels per day, thus far in 2018—accounting to 28 percent of the crude oil exports out of Iran. After November 4, India may opt to sign waivers that will allow them to continue purchasing Iranian oil, but at reduced volumes. There is some fear that the U.S. President could try to persuade India to cut off all Iranian oil imports, but China, the European Union, and Russia already plan to introduce a barter system with Iran that allows them to exchange its oil for necessary imports. President Trump has demanded that OPEC Organization of the Petroleum Exporting Countries (OPEC) raise productions to ease supply; but with the U.S. economy running hot already, demand is high and higher prices will filter through to higher inflation readings. Though OPEC has thus far refused to change its policy, there is a growing worry amongst economists over whether the organization is capable of making up for potential shortfalls in the short term. This has already dented oil demand growth; emerging markets have suffered a major depreciation of their currencies against the U.S. dollar over the past two months, making the oil they buy even more expensive. Emerging markets are currently feeling intense pressure from increased commodity prices while simultaneously working around the effects of U.S. trade wars. For example, Venezuelan oil productions is currently in a free-fall as the country traverses a deep economic crisis across many energy-intensive sectors. Emerging economics are pertinent to keep an eye on as the year comes to a close. In producing countries like Venezuela, governments may see themselves heading towards a production status of under 1 million barrels a day—potentially none at all. This is due to missed payments to oil service companies, a lack of working upgraders, a lack of knowledgeable managers and workers, and declines in oil industry capital expenditures have also contributed to production declines. Reuters has also reported that refiners in the United States and Asia have reported crude oil quality issues with imported crude oil from Venezuela, resulting in requests for discounts or discontinuation of purchases. The Federal Reserve holds the power to adjust interest rates. They have the power to place a cap on crude oil prices. Crude oil prices could follow suit if the stock market were to retreat due to interest rate hikes; however, nothing is for certain until OPEC and other producing countries provide their strategies.