More Than One Reason That Gas Prices Are On The Rise

Nevin Barich

Nevin Barich

March 18, 2022 () –

In season 4 of the Netflix show “House of Cards,” the United States is mired in a geopolitical tiff with Russia and gas prices are soaring past $6.30 a gallon (sound familiar?). Here’s what Emily St. James at had to say about the story line back in 2016:

But $6 gas is House of Cards' greatest indication to date that it takes place in a dystopian alternate reality, where the political process split off from ours some time ago and completely changed everything. It looks like America, but it's only sort of America.

Inadvertently or not, the show predicted that dystopian alternate reality on many levels. Russia invaded Ukraine, a geopolitical upheaval has resulted involving the U.S. and others, and gas prices have reached $6 a gallon in some areas.

And that begs the question: Who, or what, is to blame for these higher gas prices?

The most common answers you seem to hear on TV and social media are Russia’s war with Ukraine, the continuous greed of oil companies and President Biden’s failure to bring prices back under control. But the reality is that gas prices are rising for a number of reasons, said Patrick De Haan, Gasbuddy’s head of petroleum.

For instance, De Haan said today's gas prices have their root in the COVID-19  pandemic, with Russia's war on Ukraine pushing prices higher in recent weeks.

"The overall aspect is that supply and demand have changed," De Haan said. "Everything was upended by COVID. If it hadn't happened, we would have been in a different situation."

Also, when demand for gas and oil plunged during the pandemic, OPEC and oil-producing nations such as Russia cut production, slashing it by an unprecedented 10 million barrels, or 10% of the global supply. But as the global economy recovered from the pandemic, OPEC was slow to ramp up production, De Haan said.

"We're nearing pre-COVID levels for consumption, but production is still lagging,” De Haan said. “OPEC didn't start increasing production until July 2021. They were already too late — they were severely behind the curve."

And then there’s the biggest question of all whenever gas prices rise steadily: Is the President of the United States to blame? In the case of Biden, the answer—in simple terms—is no, said De Haan said, who pointed out that the U.S. is actually producing more oil now than it was in 2020, prior to Biden’s inauguration.

But while oil and gas drilling has increased under Biden, U.S. companies are constrained by tight supplies of rigs, trucks and labor that they need to supply more oil, De Haan said.

So now we must ask the question that everyone wants the answer to:

When will gas prices go down? 

The answer, unfortunately, is not anytime soon, according to Bill Adams, chief economist for Comerica Bank, who said overall inflation will likely get worse in March and April before improving.

"Inflation will accelerate in March and April as the knock-on effects of the Russia-Ukraine war push prices even higher at supermarkets, gas pumps and on utility bills," Adams said. 

So for now, we’re stuck in the dystopian alternate reality that “House of Cards” predicted six years ago.

Nevin Barich is the Consumer Products Analyst for Industry Intelligence, which can help YOU better address your own industry challenges. To arm yourself with the latest market intelligence, contact Ask us about our interactive intelligence map and search bot on Microsoft Teams.

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