Sigh. Increased demand is the primary driver of higher oil prices. India and China especially are using more oil than they used to.
What costs?
For a gas station owner, the cost of buying the gasoline from the refinery/distributor. For the refinery, the cost of buying the crude oil from the oil producer. At that point, it's the cost of outbidding other buyers for the oil available for delivery.
They don’t raise the prices because they need to...they raise the prices because they can.
Yes. That's how the free market works. But if someone else undercuts their price, it stops working. That's how competition works. Costs come into play when it becomes impossible for a competitor to make money by lowering their prices to gain business. And the primary cost is the cost of outbidding other buyers for crude oil.
Because they figure they’ve got the general public over a barrel.
You really need to figure out who the "they" is that you're talking about. Gas stations charge what they do because they have to; their margins are very small, on the order of 10-12 cents per gallon if they're lucky. Refineries charge what the market will bear for their refined products, but their margins aren't huge either.
The oil producers - the companies that actually extract the oil from the ground - are making a lot of money. But they don't have the power to lower the price of the oil they sell! If they would sell 10 million barrels to Company X for an artificially low price, say $10 per barrel, Company X would just re-sell it to the highest bidder at $100/barrel. All you've accomplished is taking profit from a company that actually does something productive and given it to a company that just buys and sells.
Oil producers aren't just sitting there saying "if you don't give me $100 per barrel I'm going to leave it in the ground." They're saying "if you don't pay me $100 per barrel I'll sell it to someone who will." And plenty of others will.
It really is simple supply and demand. And I really don't understand how a "conservative" can try to make some kind of grand, evil conspiracy out of it.
“Oil producers aren’t just sitting there saying “if you don’t give me $100 per barrel I’m going to leave it in the ground.” They’re saying “if you don’t pay me $100 per barrel I’ll sell it to someone who will.” And plenty of others will.”
I would say it’s both. They’re leaving oil in the ground enough to create the justification saying “If you don’t pay me $100 per barrel I’ll sell it to someone who will.”