Renewed political tension could also tip Libya back into civil war, which could put at risk 300,000 barrels of production or more. The output of several members of OPEC has declined, and there have been production interruptions outside the cartel, including in Ecuador and Kazakhstan, because of natural disasters and political turmoil. Further, the Biden administration has had some success in sending more liquefied natural gas to Europe by persuading Japan and other Asian consumers to forgo some shipments.īut global oil production has not kept up over the last year with the growth of demand despite the lingering pandemic. The European winter has been relatively mild, and the wind is blowing far stronger than last year, easing pressure on the wind power sector. The United States has been producing more oil in recent weeks, and the Biden administration is working on efforts to revive a nuclear deal with Iran that would release as much as 1 million barrels a day on the world market. There are reasons to hope an energy crisis could be averted.
That threat may turn out to be the primary reason Putin eventually looks for a compromise. Those moves would, of course, hurt Russia, and make the economic sanctions promised by the Biden administration and its allies all the more punitive. Putin could also seek to further increase pressure on the West by restricting oil exports to Europe. Utilities might have to cut back electricity production and factories might have to close early. If the gas stopped flowing, many Europeans could struggle to heat their homes. The biggest immediate threat from an invasion would be Russian natural gas exports through Ukrainian pipelines to Europe. European natural gas prices rose about 6%. They eased early in the day as traders took note of reports that Russian officials remained willing to negotiate a potential settlement before climbing again in the afternoon. It doesn't provoke a public outcry like gasoline, but it can be a silent killer of commerce and profits.,
"We are going to push the envelope with inflation that infiltrates every nook and cranny of the economy, Kloza said. For every penny that a gallon of regular gasoline rises, it costs American consumers $4 million a day, according to Tom Kloza, global head of energy analysis for Oil Price Information Service. Higher fuel prices hurt rural and working class consumers the most because they spend a larger percentage of their incomes on energy and because they typically drive longer distances in less fuel-efficient cars.
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