Gas prices are on the rise again. The steady decline to $4.07 per gallon that followed March war-driven peaks, seems to have come to an end, and experts are warning that the summer driving season will —
Over the last week, the national average for regular gasoline has increased to $4.12 a gallon today, $4.22 for New York. Although the highest prices were experienced in March when the national cost-per-gallon was $4.36, it appears that we may be approaching not only last month’s peak but also the highest ever.
Today’s average for regular gas is almost 50% more than it was during April last year. Russia’s invasion of Ukraine had a detrimental impact on the price of oil worldwide, as Russia is the world’s second-largest oil exporter and several countries have sanctioned the country after the invasion.
Experts believe that regardless of the outcome of the war, gas prices are not likely to go down any time soon. Even if the war ends soon, and U.S. producers are trying to increase oil production, gas prices are not expected to go down for a while, as it is not easy to just produce more oil.
On the other hand, if Russia persists in its invasion of Ukraine, harsher sanctions are expected, as the European Union is planning to ban Russian oil altogether. This could mean a significant rise in oil prices. Also, in the coming warm weeks, people are going to stay outside more and travel more, which can also put a toll on the delicate supply and demand balance.
Forecasters are also wary of another possible increase when China comes out of its most recent lockdown. As they are one of the biggest consumers of energy in the world and over 400 million of their people have stayed on lockdown for a couple of weeks now, reducing their demand for oil.
Although Biden’s administration is trying to come up with alternative solutions to Russian oil, there are very few measures that could have a direct and fast impact on oil prices today. The harder restrictions European countries pose on Russia, the more difficult it becomes for the oil market to drop.