Americans are getting some relief on prices at the pump, even as oil climbs back up above $100 a barrel.
Fuel costs surged to a record high last week as the Ukraine war heightened concerns that the conflict might disrupt supplies of oil from Russia, which accounts for about 12% of the global market for crude.
Gasoline prices averaged $4.27 per gallon on Friday, down from a peak of $4.33 on March 11, according to AAA. That price last week shattered the previous high of $4.10 in 2008.
Patrick De Haan, head of petroleum analysis at GasBuddy, expects gas prices to continue receding. The surge in costs has yet to put off motorists, however. He noted in a tweet that demand for gas around the U.S. this week through Thursday is up 1.4% and is at its highest point since mid-December.
Gas prices are directly linked to global supply and demand. After sinking below $100 a barrel earlier this week, both the international and U.S. crude benchmarks rose to $107.49 and $104.55, respectively, according to Bloomberg. But that is down from more than $130 last week amid hopes that recent talks between Russian and Ukrainian leaders could lead to a ceasefire.
Gas prices have climbed steadily for nearly two years, driven by several factors. Most important, demand for fuel among drivers and businesses rebounded quickly after COVID-19 erupted around the U.S. in March of 2020. A year into the crisis, the average price stood at $2.82 — up 45% from its pandemic low.
By December of 2021, gas had jumped to $3.40 amid a broader burst of inflation that also pushed up the cost of food, rent, clothes and many other goods.
Cuts to oil production by OPEC countries also reduced supplies. And gas prices edged even higher this year after Russia’s attack on Ukraine, spurring the U.S. last week to ban Russian oil and gas imports.
The U.S. now produces an average of 11.6 million barrels of oil per day, up from 11.3 million barrels in 2020, according to the Energy Information Administration. The U.S. imports less than 10% of its oil and gas from Russia.
Lawmakers in Congress have proposed ways to lower gas prices, including temporarily waiving an 18-cent-per-gallon federal gas tax. In the fall, President Biden ordered the release of 50 million barrels of oil from the nation’s Strategic Petroleum Reserve. A growing number of states are also considering whether to temporarily waive local gas taxes.
Although gas prices have soared, the previous record in 2008 remains higher when inflation is factored in —at about $5.24 in today’s dollars.
—The Associated Press contributed to this report.