The cause of rising gas prices

The effects of COVID and the war in Ukraine on gas prices and the impact on students


Bryce Clark

Gas Prices: The increase in gas prices is causing people to have to change their lifestyle to be able to afford gas. U.S. oil companies made record profits last year, which has caused them to face scrutiny from people who believe that they should lower their prices in favor of making gas cheaper. “This is not the time to sit on record profits,” President Joe Biden said in a March 31 speech.

In the last few weeks, gas prices have risen to over $4.50 in Washington and a $4.00 average in the US, largely due to the sanctions placed on Russia. This has made driving much more difficult, especially for students and people who don’t have a lot of disposable income.

Even though the US doesn’t buy very much Russian oil, many European countries who do buy Russian oil are choosing to buy their oil from other countries since they’ve stopped buying from Russia.

The new demand for oil from other sources, like the Organization of the Petroleum Exporting Countries, means that countries within OPEC, like Saudi Arabia, Iraq, and Nigeria, are increasing their prices, which affects the US because they also buy oil from OPEC.

In a speech on March 31, President Joe Biden gave the details of a two part plan that he is putting in place that he claims will make America more independent when it comes to its energy. President Biden also remarked that there were two problems at the root of the rise in gas prices; COVID-19 being the first and Russia’s invasion of Ukraine being the second.

“When COVID struck, demand for oil plummeted, so production slowed down worldwide. Because of the strength and the speed of our recovery, demand for oil shot back up much faster than the supply,” President Joe Biden said in the March 31 speech.

Now that the world has begun to recover from COVID and oil demand is on the rise again, the oil industry has also started to recover. OPEC has stated that they expect to see new refining capability come online in the near future.

“Looking ahead, from 2021 to 2026, we expect to see around 6.9 mb/d of new refining capacity come online, mostly in the Middle East, Asia-Pacific and Africa. Africa’s refining capacity is expected to increase by 1.2 mb/d by 2026 from their current levels of 4 mb/d,” OPEC Secretary General Mohammad Sanusi Barkindo said in a keynote address.

Even though recent events regarding the war in Ukraine are a big part of why gas prices have been on the rise recently, the issue goes deeper than that. Its roots being in COVID and the decrease in demand after the virus became widespread.

While increased demand for oil after COVID lockdowns has caused a steady rise in gas prices over the past few months, the ban on Russian oil imports as well as the sanctions against Russia that the U.S. as well as many European countries have put in place has caused a large spike in gas prices recently.

President Biden has recently made efforts to combat this price spike by utilizing the U.S. government’s oil reserves.

“Today, I’m authorizing the release of 1 million barrels per day for the next six months – over 180 million barrels from the Strategic Petroleum Reserve,” Biden said.

This rise in gas prices has also had an effect on students, many of whom drive to school and have jobs that they also need to drive to.

“I just make sure not to drive as much if not needed or like try to do things in one trip, you know to kind of maximize when I’m driving,” junior Shane Racine said.

There is a lot of uncertainty surrounding gas prices at the moment, and even though efforts are being made to lower gas prices, they likely won’t decrease significantly for at least a few weeks.