What’s not clearly stated amidst the details is the most basic economic principal of supply and demand.
The supplier – the oil companies – has cost and production. We can safely ignore the cost of production in this simply explanation (e.g., if they produce 100 barrels today, it will still cost the same to produce 100 barrels tomorrow).
Production is what’s available to the market. Some oil companies produce the maximum that they possibly can. Some produce what they’re allowed to by their cartel. In general, if they’re only capable of producing 100 barrels today, they’ll only be capable of producing 100 barrels tomorrow.
On the demand side, yesterday there was demand for 99 barrels of oil. This keeps the price pretty constant. If they increased the price, they’d probably sell less oil, and it might be low enough quantity that they actually make less money. If they decrease the price, the most they could possibly sell is 1 additional barrel of oil, and so they’d probably also make less money. So, it’s kind of stable.
Today, though, demand is exactly 100 barrels. Price could be stable. Some smart people would bet, though, that demand demand will change tomorrow. They can either bet against or for increased demand (or supply — it doesn’t matter which).
Tomorrow arrives, and total demand is now 110 barrels at yesterday’s price. Because only 100 barrels are available, many buyers will start offering more in order to ensure that they’re in the group that gets a part of that 100 barrels (that’s why demand drives the price). Because the price goes up, there are a very few that will decide that they don’t need gas at the increased price. The price will keep going up, and more and more will decide not to purchase gas until an equilibrium is reached, and the result will be that the 100 barrels will sell for the price that enough people are willing to pay against the number of people who don’t want to pay.
Gasoline is the type of commodity (unlike imported Gruyere cheese) that people really, really need. This is why when demand goes up relatively little (e.g., economic growth) or supply goes down (revolution in a major supplier country), the price can go up significantly. In the case of imported Swiss, though, people can just stop buying. Prices will drop fast. (This is actually leads to one of the cases that people make for agricultural subsidies: price stabilization and predictability.)
Now it’s pretty easy to see that (a) the market really, really did set the price, and (b) the supplier (with no increased expense) would realize significantly higher profits.
This is a cool site which is easy to follow and explains basic economics in easily digestible terms.