Energy News Today

How oil supply impacts changing prices at the pump

The United States has banned the imports of Russian oil, natural gas and coal in response to the Russian invasion of Ukraine.This new sanction will continue to impact prices Americans are paying at the pump.According to AAA, the average price of gas in South Carolina is now $3.97 per gallon. It says the highest recorded price of gas was $4.12 per gallon in 2008.Some prices around the Upstate are topping $3.97 per gallon.The average price of gas in South Carolina still comes in under the national average of $4.17 a gallon. “They actually reflect both the current availability of oil and what we think is going to be available down the road,” Clemson University economics professor Scott Baier said. “So if you think less is going to be available down the road, that’s going to impact prices, again, today.”Baier says these prices are pretty unprecedented. he says the last time we saw similar gas prices was a decade ago.“We’re really using this common pool of oil, and if Europe has to look elsewhere for its supply of oil, that’s going to cut into the amount available for the U.S,” he said.According to the U.S. Energy Information Administration, around 8% of all of the U.S.’s crude oil and petroleum imports come from Russia. “There’s no real short-term fix,” Baier said. “In the longer run, some countries, including the U.S., have some ability to increase capacity. So we have the U.S., Saudi Arabia, Venezuela and Iran.”Some lawmakers have been pushing to reopen the Keystone Pipeline as a way to relieve the staggering prices and demand. “The Keystone Pipeline is not a quick fix,” Baier said. “It’ll take a while for that oil to come online. So that won’t have an immediate on the pump.”Baier says it could take months, if not years for the pipeline to get online and start supplementing the oil supply.“In the long run, it’ll deliver, potentially 830,000 barrels of oil a day from Canada, and this will provide some insurance against supply shocks like this,” he said. However, he says the U.S. uses roughly 18 million barrels of oil a day.He also explains, releasing oil from strategic petroleum reserves isn’t a long-term fix either. “With the strategic petroleum reserves, that’s more symbolic,” Baier said. “There’s not enough oil in the strategic petroleum reserves to keep oil prices down for any lasting period of time.”Baier says skyrocketing gas prices could drive up prices across the board, putting pressure on the delivery of goods and services. He says it could also push people to work from home if possible or carpool more often.As the war in Ukraine intensifies, Baier says people can expect gas prices to remain steep.

The United States has banned the imports of Russian oil, natural gas and coal in response to the Russian invasion of Ukraine.

This new sanction will continue to impact prices Americans are paying at the pump.

According to AAA, the average price of gas in South Carolina is now $3.97 per gallon. It says the highest recorded price of gas was $4.12 per gallon in 2008.

Some prices around the Upstate are topping $3.97 per gallon.

The average price of gas in South Carolina still comes in under the national average of $4.17 a gallon.

“They actually reflect both the current availability of oil and what we think is going to be available down the road,” Clemson University economics professor Scott Baier said. “So if you think less is going to be available down the road, that’s going to impact prices, again, today.”

Baier says these prices are pretty unprecedented. he says the last time we saw similar gas prices was a decade ago.

“We’re really using this common pool of oil, and if Europe has to look elsewhere for its supply of oil, that’s going to cut into the amount available for the U.S,” he said.

According to the U.S. Energy Information Administration, around 8% of all of the U.S.’s crude oil and petroleum imports come from Russia.

“There’s no real short-term fix,” Baier said. “In the longer run, some countries, including the U.S., have some ability to increase capacity. So we have the U.S., Saudi Arabia, Venezuela and Iran.”

Some lawmakers have been pushing to reopen the Keystone Pipeline as a way to relieve the staggering prices and demand.

“The Keystone Pipeline is not a quick fix,” Baier said. “It’ll take a while for that oil to come online. So that won’t have an immediate on the pump.”

Baier says it could take months, if not years for the pipeline to get online and start supplementing the oil supply.

“In the long run, it’ll deliver, potentially 830,000 barrels of oil a day from Canada, and this will provide some insurance against supply shocks like this,” he said.

However, he says the U.S. uses roughly 18 million barrels of oil a day.

He also explains, releasing oil from strategic petroleum reserves isn’t a long-term fix either.

“With the strategic petroleum reserves, that’s more symbolic,” Baier said. “There’s not enough oil in the strategic petroleum reserves to keep oil prices down for any lasting period of time.”

Baier says skyrocketing gas prices could drive up prices across the board, putting pressure on the delivery of goods and services. He says it could also push people to work from home if possible or carpool more often.

As the war in Ukraine intensifies, Baier says people can expect gas prices to remain steep.

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2022-03-08 22:11:00

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