International oil prices are soaring due to Russia’s invasion of Ukraine. At the same time, attention is being paid to why gasoline price in the U.S., which rarely use Russian oil, exceeded $4 per gallon, the highest ever.
However, OPEC+, a consultative body between the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries, maintains the existing policy of increasing production and is not in a hurry to come up with measures due to a decrease in production. This is attributed to Russia’s great influence on OPEC+.
If so, the United States is the only country that can expect an increase in production. The United States was ranked the world’s No. 1 oil-producing country last year. The supply is higher than Russian oil, the world’s second country, which produced 9.7 million barrels a day. In the case of the United States, it produced 10.2 million barrels a day last year.
U.S. oil companies can make huge profits as long as they increase production under the current circumstances. Nevertheless, the prevailing view is that it cannot or will not fill the supply gap.
This is because in the aftermath of COVID-19, U.S. oil companies are still suffering from the pain of the massive bankruptcy in 2020. Since then, stock price performance of major oil refiners has also fallen behind the market as a whole. Furthermore, due to the paradigm of transition to eco-friendly clean energy, these companies are passive in increasing production facilities or hiring additional employees.
The average price of gasoline in the United States was $4.35 per gallon as of the 11th. California averages $5.28 and is the highest in the United States. A gas station in Los Angeles (LA) is known to cost more than $7 per gallon. As a result, some predict that the U.S. average gasoline price could soar to $6 per gallon.
