Here is the price of Brent crude over the past couple of years.
The price of Brent crude dipped at the start of the pandemic and then started recovering. This is far before the Ukraine war. The price mostly recovered by July 2020, which is where I start my chart, and then rose 130% ($60) by January 2022. After the Ukraine war started, the price increased another 25% ($25).
In other words, the Ukraine war is not the primary cause of high oil prices (and hence high gasoline prices). It just added a bit to a price that had already been soaring for a long time.
Gas is still way to cheap!
The price needs to be something like $11.50/US gallon in order to have the reduction of emissions needed to save the climate according to the experts.
It’s getting close in some other western countries but gas has always been incredibly cheap in the US of A . Problem is that elected representatives in many (most ?) places are starting to chicken out and are promising to increase (already insanely high) subsidies (presently $5,9 trillion/year according to IMF)
A small reminder from a Swede
I think Dems should campaign on this goal of raising prices to $11 per gallon.
Yep … because campaigning on promising to save living conditions for our grandchildren sure isn’t a winner. Not in USA or anywhere else.
But I must say I sometimes wonder which statesmen history will remember as the heroes of our times.
The ones posing at gas-pumps loudly demanding the right to continue to emit as much as possible or the few who are telling the truth
Biggest problem is the narrative chosen by most mainstream media. Inflation and price of gas is headlines and a catastrophe while people dying somewhere else out of climate breakdown is second or third rate news
Agree. Dems should take this to heart and campaign on that goal of $11 per gallon.
Nope ..
$11.50 !
While $11.50 US gallon might be a social good, it would likely result in a political landslide for the Republicans: they would run on drill baby, drill....
I am not stupid, I know what will happen and that goes for all other countries as well .
My comment is about how reporting on news is handled.
As I stated is inflation and price of gas a catastrophe. Covid has constantly been headline news since early 2020 up until recently and all media has been reporting on Covid deaths as prime news every day. It’s been a disastrous epidemic. Death toll is tricky to estimate but it’s something like 6,3 m today.
At the same time has 5 m person/year died of “suboptimal temperatures” caused by climate breakdown (according to the Lancet) . Remember also that this is just the beginning, it will soon get much worse
How many who has died of other complications from climate breakdown isn’t possible to calculate
What if this was reported in the same way as Covid deaths was reported?
Daily headlines , big letters!
We humans aren’t that good at reacting on unclear threats in some future but we don’t have time to handle this in the “ostrich style “ anymore. We need to stop reporting price of gas as the worst possible catastrophe we are facing
No kidding. That’s why everyone laughs at Biden when he blames it on Putin. What a joke.
Kevin's graph is misleading. I'm truly surprised that he started a chart in the middle of the pandemic
https://www.macrotrends.net/2480/brent-crude-oil-prices-10-year-daily-chart
For the decade from 2012 to 2022 Brent crude averaged around $75-80 / barrel .
That's about what it was at the start of this year. So, yes, Trump's very smart pal Vladimir Putin's invasion of Ukraine is clearly a big factor on the price of gas at the pump right now. Other than the distorting effects of the pandemic and our recovery, what else could account for it ? Well, there's profiteering by the big oil corporations (which Kevin has shown elsewhere) but who can fault them for exploiting an opportunity, amirite ?
Yeah, oil prices didn't get back to pre-pandemic levels until April 2021 where they held steady until Dec 2021. Then the Russian buildup began and prices began a steep rise. Starting the chart in July 2020 is absurd.
So to what do you attribute as the cause of the rise in oil prices?
Americans are wrong. It's the bet Russian oil production would collapse that fueled the bubble. A idea the EIA will destroy tomorrow. Showing a overvalued price. Instead, Russia is pumping oil on the cheap to southeast asia, with opec now having freed up reserves. When gas futures are at 2.50, lessons will be learned.
The rise to 80$ a barrel was the rise necessary to make producing oil profitable plus the overshoot that always occurs when going from loosing money to making money. The rise since then is the ukrainian war.
Something like 80% of people in the USA commute to work by car, and in many cases have no alternative to get there. This makes high gas prices particularly hard on working people, including the poor. No amount of hand waving will instantly make it so most people can afford EVs or be able to commute to work via public transit. It will take lots of economic pain to get there.
Do anyone truly expect we , in the global north, will be able to handle climate breakdown without sacrificing some of our privileges?
We who are having it all are the ones who have caused climate breakdown, we who are living as if we are living on a planet with infinite resources and we who are living as if tomorrow doesn’t exist.
Remember, even low income groups in countries like USA is extremely wealthy in a global perspective
We are used to be able to travel hundreds of miles in all directions in just hours at an affordable cost. We are used to be able to fly to romantic remote islands just for fun at any time we choose. We who are able to buy new outfits at any time.
If some politicians or some activists are implying we need to scale down , pay a little more for gas or electricity, in order to save the future for all coming generations are we freaking out and calling them prophets of doom and we are instead turning to politicians who are ensuring us that they are going to handle climate without demanding us to sacrifice anything . They are promising us to reach “net zero”(net zero is a scam) in some distant future and that will be sufficient to save the future of the human race
They are lying!
A comment from a disillusioned Swede
So those 80% of people should just stop working to help save the environment?
Stop trying to bolster your cred with Swedish-ness eh. You (us) people ain't saints.
Gallup data from 2018
"The vast majority of American workers remain reliant on cars to get to work, but not as many as a decade ago. In 2007, 85% of Americans drove themselves to work and 6% rode with someone else. But by 2018, while the 6% of Americans who carpool has remained constant, there has been a decrease in the percentage of those who drive themselves to work, edging down to 77%. Meanwhile, the minority of Americans who employ alternative ways of getting to work -- mass transportation, walking, biking, working remotely or "something else" -- has grown, from 9% in 2007 to 16% today.
The numbers of car commuters seem to have remained steady over the past few years. Despite the increase of work from home - apparently, the decline in carpooling and mass transit (no doubt Covid-related) has offset.
Speaking of offsets: a moderate increase in fleet fuel efficiency has been largely wiped out by longer commutes over the past two decades.
Doubt that the Swedes have nearly as many truly low-income people working two - or even three - jobs as the US has. And part of the gig economy is the delivery service (not Amazon, FedEx, UPS) that provides some jobs to those who make life easier for others who can afford regular deliveries.
Since vision problems make reading online difficult, I get my newspaper delivered - by a guy who lives in another county (not adjacent) & whose territory is large. In addition to making allowances for late delivery, I add to my monthly tip when possible. Not everyone lives in a Tesla world, or can - no matter who lectures us. And having spent decades using a bus system that made the simplest trip take hours, I know that's a poor solution for those lacking EVs or confining their lives to cities with subways.
I'm for improving our response to our climate problems but tired of those who think that everyone can just knuckle down decide to make sacrifices as if we all enjoy the same options.
Did I write about buying Tesla’s as the solution ?
Did I mention Sweden?
Did I compare USA to Sweden?
I stated that low income Americans are wealthy in a global perspective and they definitely are.
The classic climate denier isn’t found as often as before. The ones who
”convincingly” rebutted the entire scientific community based upon some article they found on some obscure internet site.
But we are having a couple of new groups of deniers.
One such group is the ones who are blaming it all on the Chinese and Indians. “We don’t have to cut down since they aren’t “ (the ones who are emitting much less per capita than we who are having it all )
Another group, and they are a dangerous group is the ones claiming “ it’s to late, it’s no use so why should I care” .
We still have time to fix it if we are decisive!
And the ignorant ones: “it won’t be that bad all we have to do is to adapt”. Remember , our trillion and trillion and trillion $ infrastructure sure ain’t gonna handle what we are facing if we won’t change
The most stupid deniers are fans of the overpopulation cult. “We must stop having children”(meaning it’s “the others” in poor parts of the world who are causing it since they are breeding like rabbits) Yes , we are to many but condomes won’t save us in time since we must swing everything around in just 8 years. If we want to solve this using population control will we have to start executing people, preferably Americans since you are more or less the worst per capita emitters on the planet. One has to kill a dozen Indians to have the same effect as killing just one American
The biggest groups of deniers are the ones who are trusting politicians and companies who are ensuring us they are in control. Politicians who are telling us it’s no hurry, “net zero” in some distant future will be sufficient
We need to turn this around today, not tomorrow and we don’t have any more excuses
I don't think its completely appropriate to use strictly the invasion date to reflect Ukraine invasion impact. Markets are forward looking and oil prices began rising as soon as Russia built a material presence on the Ukraine border. So going back to December or January likely provides a more complete indication.
Agree with this, prices started going up late 2021 on the anticipation of war from around $80 - which is just the higher end of the historical range oil has been in over the last 20 or so years.
This is a good point. If the prospect of war in Ukraine wasn't the cause of the large run-up in prices in December, January, and February, what was?
How about just .. a growing shortage of oil? We are at or have passed peak oil. From now on petroleum products will get more and more expensive, in a wavy way as the ever fewer remaining sources are found.
Nope. There is no real shortage. Didn't you learn anything in the past decade????
He learned not to be as mind boggling stupid as you. New oil wells in the bakken have 25% less oil than 6 months ago. In the permian they have 20% less oil. US oil reserves fell 20 % in 2021. We've used up most of the oil from the fracking revolution already.
This is a good point. We knew Russia was building up forces during late fall 2021 and there was talk of war in Jan 2022. Choosing a specific date is going to be a bit random, but the chart above is certainly wrong.
I think this is a poor representation - I would argue the normal price over the last 20 or so years is more like the 60-80 range - so like 30 of the increase from your starting point is just a return to normal. Second Russia started amassing troops and signaling war late in 2021 when oil was around 80 - so now you can attribute more like $40 to Russian war. Plus none of these numbers are inflation adjusted.
Kevin---you know better. Any realistic comparison has to be to prices pre-pandemic. With economies back up and running, oil prices in the range of $80 to $100 per barrel are expected. And gas around $4/gallon also expected, though people will still complain about it.
Kevin is arguing a zero sum game. Russia accounts for maybe 30% of the price increase of gas. The OPEC refusal to increase production another 30%. Lastly refinery capacity decreased due to COVID collapse likely 20%. We are the frog in boiling water. What happens when people who are driving more miles can't pay their credit card bill?
What happens when people who are driving more miles can't pay their credit card bill?
Think about how little you need to make the minimum payment on a credit card. If people can't make that, then they can't feed themselves.
Opec has actually increased production a bit, more than they announced. Maybe your forgetting a true term: market fraud.
Market failure. Interestingly us refinery production has completely recovered. A market refuses to follow reality, deserves to crash.
Not really
https://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm
TLDR
capacity in 2016: 141 in 2021: 129.
Nope, watch the update. It's at 2019 levels.
At EIA, Brent prices, select the "10 year seasonal analysis": https://bityl.co/ChQ8
Same applies to WTI, but the rise is smaller: https://bityl.co/ChQL
You can see two big outlier "seasons": The start of the pandemic and the anticipation of the Russian invasion.
KD- Ukraine may not be the “primary” cause for most of the increase in the cost of oil but maybe the amount you attribute the cost to the war is the inflection point? People are a costumed to the vagaries of the market but it seems to me the oil cost attributed to the Ukrainian war represents the political and economical tipping point, so really the opposite of what you concluded.
I disagree with Kevin's reading of his own graph here. Prices clearly started to spike in late 2021/early 2022 when it became clear that a Russian invasion of Ukraine was a real possibility and energy traders began pricing in that uncertainty. Well, here we are. Russia invaded, got slapped with massive sanctions, and, as we know, energy markets just luuuuuv war and uncertainty.
So gas prices were sneaking up during most of 2021, mostly because everybody started up businesses, travel, building, and other activities as covid restrictions were eased and energy companies had retrenched during the pandemic and supplies were short as they attempted to ramp production back up. Then came the war.
So yes, most of this is on Putin. Unless you're of the opinion that Biden should have just offered up Ukraine to be slaughtered and signed an extra generous oil deal with Russia to keep them Suburbans filled with cheap gas, which Tucker Carlson and his dead-eyed Fox acolytes are.
Yes, Ukraine was not the original reason oil price rose at the beginning of Kevin's chart. The chart starts with oil costing 40$ a barrel. The problem is that oil had to sell for 60$ a barrel for oil to be profitable. It presently needs to sell for 75$ a barrel to be profitable (Today's wells have 25% less oil in them then they did a year ago. So , yes most of the initial rise in oil was to turn a money destroying industry into profitable industry. Nobody could do anything about that price rise since industries can only exist in the long term if they can generate a profit