Red Wines are Aged in Oak Barrels, Right?

Well, nope. Most premium reds, yes. The less expensive stuff, not likely. Oak barrels are expensive--$400 to well over $1,000 each. A standard barrel holds about 24 cases of wine (there are larger barrels holding more). Plus a red wine will usually spend a couple years, plus or minus, in oak barrels. As you can see this would get cost prohibitive for a ten dollar wine. The average value of a wine purchase in the U.S. is a bit over ten bucks.

So the cheaper wines use things like oak chips or oak powder. They are cheaper and they work faster. Oak changes the color, flavor, tannins and texture in a wine. Through technologies and experience these oak barrel substitutes come pretty close to tasting like a wine from a barrel. Since you're already getting cheaper grapes having less expensive oak treatment shouldn't a big deal.