Pains at the Pump
By Greg Wells
Gas prices are up like they have never been before and though some blame can be put on Russian President Vladimir Putin and his war on Ukraine, there is another culprit in all of this.
Saudi Crown Prince Mohammed bin Salman, the fellow the Central Intelligence Agency and our State Department has stated ordered the killing of an American journalist Jamal Khashoggi is also the person who controls the flow of oil from Saudi Arabia.
Though the US has asked that the Saudis release more oil onto the marked, which would lower prices, that country has not done so. They increased production when asked in the past correcting pricing issues, but the Prince is refusing, and many have linked this to American officials’ loudly accusing him of ordering a murder of a critic of his family’s rule.
With Kentucky prices up almost 14 cents in just the last week and nationally the average is up to over $5 a gallon for regular gas and diesel prices closing in on $6 both all-time records Americans are feeling the pinch of sky-rocketing prices not seen since the 1970s.
That was the fist time the Saudi government used the price of oil to assert themselves internationally.With gas prices in Kentucky averaging $4.81 at the start of this week, and $5.01 as the national average for gas there are cries for the American Government to “do something.”
In early March the $4 level was exceeded for the first time since 2008. By April Diesel fuel was over $5, a new record, according to Patrick DeHaan, Head of Petroleum Analysis for Gas Buddy, which provided the other gas data.
They also report that refinery capacity is down, and that crude oil stocks are down significantly, and make much of the impact of Russian oil being blocked from the international market.
Few news agencies have reported on the Saudi’s refusal to release more oil. They have also not generally noted that Libyan oil has stopped flowing, as political protests in that country are shutting down oil fields and closing ports. This has a reported impact of more than 1 Million Barrels of Oil per Day (Bpd) of production.
The national news has noted that China is coming out of their latest COVID-19 shutdown, and demand for fuel there is expected to rise, driving up prices internationally.
All this as an oil industry news site noted that Trafigura, one of the largest international oil trading companies is reporting record profits. The story this week said that company netted a $2.6 Billion profit in the six months ending in March. That company’s CEO Jeremy Weir reportedly said in a release that they do not expect the market dynamics to change in the near future.
Presently $100 is the benchmark price for a barrel of oil, just like it was in 2014, but the price of gasoline then was around $4 a gallon. Analysts point to a higher demand as we come out of the pandemic lock down as one reason for the higher prices at the pump, as well as American refineries not running at full capacity, but it is reasonable to wonder if that would increase gasoline prices in other countries.
Again, according to another industry site, refineries across Europe are closing, reducing output and taking other measures that limit the production of gasoline and diesel Fuel.Then there is that mention of China wanting more oil. They are not sanctioning Russian oil, and as the relationship between the two countries is reportedly warming, would they not be buying all that Russian oil Putin can’t sell to the US and the European Union?
Is there possibly an issue with an industry that sees electric vehicles taking their future away possibly take action, and profits, while they still can?