Energy: Oil prices wreak economic havoc worldwide




  • In Business
  • 2022-06-26 09:55:10Z
  • By The Week
Gas prices.
Gas prices.  

The smartest insight and analysis, from all perspectives, rounded up from around the web:

A graphic designer in San Francisco is cutting back on dining out. A motorcycle taxi driver in Vietnam turns off his ride-hailing app rather than burn fuel during rush hour. A retiree in Germany says he is ready to give up his car. Around the world, consumers are feeling the sting from soaring gas prices, said Daniel Niemann in The Associated Press. For the first time, the average cost for a gallon of gasoline in the U.S. was over $5 last week, and it's worse in much of the world: a gallon would cost you more than $10 in Hong Kong, $7.50 in Germany, and $8 in France. Gasoline has been "a key driver of inflation," and it's already changing spending habits. Much of the blame has been pinned on Russia's invasion of Ukraine, which "jolted energy markets that were already facing tight supplies."

The global oil industry also completely underestimated "the speed with which demand" would rebound after the pandemic, said Irina Slav at OilPrice, "and how resilient this demand would be." Russia's invasion of Ukraine was certainly a massive "wild card" for the oil markets, but "even the known cards have refused to play into the assumptions by analysts." OPEC, the 13-nation oil cartel, has missed its own quotas, while "pent-up post-COVID demand" has been stubbornly resistant to high prices, creating "a perfect oil storm." Oil traders are waging heavily on gas prices remaining elevated into next year, said Javier Blas in Bloomberg. "The refining sector represents another problem," because "the world has effectively run out of space to turn crude into usable fuels." A global pivot away from fossil fuels has left owners wary of restarting operations or making costly upgrades. The shortage of refiners means that consumers are paying even more "to fill their tanks than oil prices suggest."

Meanwhile, oil money keeps flowing into Russia's coffers at a blistering pace, said Bryan Pietsch and Ellen Francis in The Washington Post. Moves by Western powers to ban Russian oil imports were supposed to be crippling. Instead, while "the volume of Russia's fuel exports fell 15 percent in May compared with the period before the invasion," sky-high oil prices mean "Russia may be making more revenue." The Center for Research on Energy and Clean Air recently found that Russia made $97 billion from fossil-fuel exports in the first 100 days of the war, and its export prices "were on average 60 percent higher than last year."

No president can do much to control oil prices, but President Biden "has to try," said Clifford Krauss in The New York Times. He will meet Crown Prince Mohammed bin Salman in Saudi Arabia in July, a trip that's painfully reminiscent of Jimmy Carter's flight "to Tehran in 1977 to exchange toasts with the shah of Iran." The White House has "also been in talks with Venezuela and Iran." Any deal with either country is "politically perilous." But it's the rock or the hard place for Biden, knowing voters are just as likely to "turn against presidents who seem unwilling or unable to bring" gas prices down.

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

You may also like

Clarence Thomas: Supreme Court should 'reconsider' rulings on contraceptives and same-sex marriage

Did Texas Republicans endorse secession at their party convention?

House sends gun reform bill to Biden

COMMENTS

More Related News

Russia, planning to go it alone, unveils model of new space station
Russia, planning to go it alone, unveils model of new space station
  • US
  • 2022-08-15 13:52:20Z

Russia, in the throes of what some Kremlin hardliners believe is an historic rupture with the West sparked by sanctions imposed over what Moscow calls its...

Putin and Kim Jong Un pledge closer relations as Russia courts non-Western allies in the wake of its Ukraine invasion
Putin and Kim Jong Un pledge closer relations as Russia courts non-Western allies in the wake of its Ukraine invasion
  • World
  • 2022-08-15 11:35:16Z

Putin and Kim Jong-Un exchanged warm messages on the occasion of a Korean national holiday, at a time when both leaders are increasingly isolated.

Putin knows he
Putin knows he's made a 'grave mistake' invading Ukraine but will never admit it, says former NATO commander
  • World
  • 2022-08-15 10:47:32Z

Putin "in his heart," would know he is to blame, said James Stavridis, a former NATO official and admiral in the US Navy.

Rouble falls past 61 vs dollar as conversion of depository receipts begins
Rouble falls past 61 vs dollar as conversion of depository receipts begins

The rouble slid past 61 to the dollar on Monday as the conversion of depository receipts in Russian companies to local shares got underway and as foreign...

Boredom, loneliness plague Ukrainian youth near front line
Boredom, loneliness plague Ukrainian youth near front line
  • World
  • 2022-08-15 06:27:33Z

Anastasiia Aleksandrova doesn't even look up from her phone when the thunder of nearby artillery booms through the modest home the 12-year-old shares with...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

  • facebook解封
    (2022-06-28 20:03:01Z)

    事实上,facebook账户被屏蔽是正常的。特别是在美国大选的初期,该组织发布了许多信息,都在抱怨账户被屏蔽。如果您的个人数据是真实的,并且没有严重违反社区规定,那么解封并不困难

    REPLY

Top News: Business