The price goes up everywhere.
In late January 2022, crude oil reached its highest price in seven years, carried there by the converging currents of pandemic disruption, cartel underproduction, and the shadow of war gathering on Europe's eastern edge. What markets measure in dollars per barrel, ordinary families measure in the widening gap between what they earn and what it costs to simply move through the world. The forces driving this moment — geopolitical brinkmanship, supply chains still healing, and the uneven burdens of inflation — are not new to history, but their simultaneity makes relief difficult to imagine and easy to fear.
- U.S. crude surged 36% in under two months to reach $87 a barrel, pulling gasoline prices to $3.33 a gallon and becoming one of the sharpest edges of a generational inflation crisis.
- Russia's massing of 100,000 troops on Ukraine's border has placed 4-5% of the world's total energy supply under the threat of sudden disruption, with Europe's deep dependence on Russian fuel amplifying the stakes for every nation watching.
- OPEC+ nations are falling short of their own production commitments, American oil companies have not restored pre-pandemic output, and a global scramble for liquefied natural gas has pushed some energy providers to burn oil for electricity — draining supply from multiple directions at once.
- The families absorbing this pressure most directly are those with the least flexibility: lower-income workers who must commute, households already strained by food and housing costs, now spending $43 a week on gasoline where they once spent $30.
- With strategic reserve releases already exhausted as a policy tool and spring's historically higher demand approaching, no clear mechanism for relief is visible — and the Russia-Ukraine situation remains the largest and least predictable variable of all.
Crude oil climbed to a seven-year high of $87 per barrel in late January 2022, a 36 percent rise since early December. At the pump, that translated to $3.33 per gallon of regular gasoline — nearly 40 percent more than a year prior — making energy one of the central drivers of inflation not seen in a generation.
The causes are layered. The pandemic has kept both supply and demand unpredictable, producing wild price swings in both directions. President Biden's November release of strategic petroleum reserves briefly steadied markets but could not reverse the trend. The omicron wave reduced travel modestly, but not enough to ease prices. Meanwhile, OPEC+ nations have underproduced relative to their commitments, American oil companies have not restored pre-pandemic output, and a global shortage of natural gas has led some energy providers to burn oil for electricity instead — compressing supply from several directions simultaneously.
The most volatile threat, however, is geopolitical. Russia has positioned roughly 100,000 troops near Ukraine while demanding guarantees that NATO will never expand to include it. Russia supplies 30 to 40 percent of Europe's energy and represents 4 to 5 percent of global exports. Any invasion and the sanctions that would follow could remove a significant portion of world supply overnight, sending prices sharply higher still.
The burden falls unevenly. Lower-income workers in service and retail jobs — those who cannot work from home — are spending roughly $43 a week on gasoline, up from $30 a year ago, even as food, housing, and other costs continue to rise. The child tax credit that had offered some cushion has expired. For these households, there is little room left to absorb more.
Looking ahead, the picture offers little comfort. Spring typically brings increased driving and higher fuel demand. The strategic reserve has already been deployed. And until the situation at Ukraine's border resolves — one way or another — energy markets are likely to remain both expensive and unstable.
Crude oil has climbed to its highest price in seven years, and the ripple effects are already visible at every gas pump in America. A barrel of U.S. benchmark crude reached $87 in late January 2022, a staggering 36 percent jump since the start of December. For the average driver, that translates to a gallon of regular gasoline now costing $3.33—up nearly 40 percent from $2.40 a year earlier. The surge has become one of the primary engines of inflation, which has reached levels not seen in a generation, touching everything from grocery bills to rent to the used car market.
The causes are layered and interconnected. The pandemic continues to create unpredictability in both energy supply and demand, sending prices into wild swings. In the fall, crude had plunged nearly as steeply as it has now risen, leaving consumers whipsawed by volatility. President Biden attempted to intervene in November by announcing the release of oil from the nation's strategic petroleum reserves, a move that briefly calmed markets but ultimately proved insufficient to reverse the upward trajectory. Then the omicron variant surged globally, and while it did suppress travel—traffic declined by 8 or 9 percent in many regions—the reduction in fuel demand was not enough to ease the pressure on prices. The market, as one analyst put it, simply overlooked these details.
Supply constraints compound the problem. Nations within the OPEC+ cartel are producing less oil than they committed to in recent negotiations. American oil companies, which throttled back production when the pandemic began, have not ramped back up to pre-crisis levels. Meanwhile, natural gas shortages in Europe and Asia have created bidding wars over shipments of liquefied natural gas, driving those prices to extraordinary heights. Some energy providers in those regions have begun burning oil to generate electricity instead, further draining available supplies and pushing crude prices higher still.
But the most immediate threat to global energy stability is geopolitical. Russia has massed approximately 100,000 troops along Ukraine's border and is demanding that NATO pledge never to admit Ukraine as a member—a condition unlikely to be met. The U.S. State Department has already ordered families of American embassy staff to evacuate Ukraine. Russia supplies between 30 and 40 percent of Europe's oil, gas, and coal, and accounts for 4 to 5 percent of the world's total energy exports. An invasion would almost certainly trigger economic sanctions from the United States and Europe, potentially cutting off a significant chunk of global energy supplies and sending prices even higher. As one energy analyst noted, if the world suddenly loses access to 5 percent of its energy, the price goes up everywhere.
The human cost is already being felt most acutely by those least able to absorb it. Lower-income workers in public-facing jobs—retail, hospitality, service industries—have been hit hardest, particularly those who must commute to their workplaces. Office workers who have had the flexibility to remain home have largely escaped the impact. A typical family is now spending $43 per week on gasoline, compared to $30 a year ago, a burden that lands especially heavily on households already stretched thin by inflation in food, housing, and other essentials. The child tax credit that provided some relief has recently expired. For families with children who need to be driven to school, medical appointments, and other essential destinations, there is little room to cut back.
Home heating oil prices could also rise, though the impact may be somewhat muted because many households filled their storage tanks before winter set in. But gasoline, which people must purchase continuously, offers no such buffer.
Relief appears unlikely in the near term. The winter months typically see less driving, but as spring arrives and weather warms, fuel demand historically increases, which usually pushes prices higher. The federal government's options are limited—the strategic petroleum reserve release has already been tried and found wanting. The biggest unknown remains Russia's next move and how the United States and Europe will respond. Until that uncertainty resolves, energy markets will likely remain volatile and expensive.
Citações Notáveis
COVID has upended everything. It's even made a lack of predictability even more unpredictable.— Andrew Gross, AAA spokesman
Those who are front-line workers, have children who they need to drive to school, the dentist and other essential trips—they will bear the full burden of these increases. There's not a lot of room to cut back.— Mark Wolfe, executive director of the National Energy Assistance Directors Association
A Conversa do Hearth Outra perspectiva sobre a história
Why has oil spiked so dramatically in just a few weeks?
It's not really a few weeks—it's been building. The pandemic created this chaotic pattern where supply and demand keep shifting unexpectedly. Then you layer on OPEC+ countries not delivering the oil they promised, American producers still running below capacity, and suddenly there's a real shortage. The Russia-Ukraine situation just amplified the fear.
But didn't the President try to fix this by releasing oil from reserves?
He did, and it helped temporarily. Prices fell in anticipation. But it wasn't enough to reverse the underlying pressure. The market needed more than a one-time release—it needed sustained supply or reduced demand, and neither happened.
So who actually suffers from this?
The people who have no choice but to drive. If you work retail or healthcare or construction, you're commuting every day. If you work from home, you barely notice. That's the real inequality here—it's not evenly distributed pain.
Is there any scenario where prices come down soon?
Not really. Spring usually brings more driving, which pushes prices up. And Russia is still sitting there with 100,000 troops on Ukraine's border. Until that resolves, the market stays nervous and expensive.
What about natural gas?
It's a separate crisis that's actually making oil worse. Europe and Asia got into bidding wars over liquefied natural gas, prices went crazy, so some power plants switched to burning oil instead. That drained oil supplies further and pushed crude prices up even more.