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PolitiFact is the latest to release a fact check that shows how the war in Ukraine is driving sky-high gas prices around the country, once again debunking the Big Oil talking points that the NH GOP Senate candidates parrot, which falsely blame President Biden for rising prices. In the piece, PolitiFact lays out how Putin’s invasion of Russia, the pandemic, Big Oil’s low investment in production, and OPEC’s long-standing refusal to increase production have contributed to higher prices – not the Biden administration’s policies. Key Excerpts:
Gasoline prices have risen most aggressively since Putin began preparing his invasion of Ukraine.
"Gasoline and crude oil prices overall have increased significantly over the past year due to a variety of factors, mainly driven by increased demand due to recovery from the COVID pandemic and associated problems with the supply chain and employment," said Hugh Daigle, an associate professor at the University of Texas-Austin’s Center for Subsurface Energy and the Environment.
That said, the price of oil is determined by international factors, and because other countries are more heavily dependent on Russian oil than the U.S. is, any cutbacks in the use of Russian oil elsewhere can reduce global supplies, pushing prices higher for U.S. consumers.
We chose November 2021 as a turning point because that’s when a continuing Russian troop buildup on Ukraine’s borders began to attract wider notice. On Nov. 3, Ukrainian officials said the number of Russian troops on its borders had reached 90,000, and on Nov. 10, the Biden administration offered public warnings about the military buildup.
By early December, the buildup and potential invasion became widely known to news consumers in the U.S., documented in the New York Times and other publications.
Between early November and the start of the Russian invasion in late February, U.S. gas prices rose modestly, climbing 10 cents to $3.49.
The big spike came when the invasion began, with the price of gas rising by 83 cents to $4.32.
So Putin’s invasion clearly caused the single biggest gas price spike during this period. And gas prices did rise during the four-month-long build-up to the invasion.
When the U.S. economy began sputtering back to life during the second half of 2020, it increased demand for oil, which in turn pushed up gas prices.
"I think it’s fair to say that much of the run-up happened before Russia’s buildup became a focus, and was driven by the post-COVID recovery in global demand," said Mark Finley, a fellow at Rice University’s Center for Energy Studies. Finley added that a longstanding refusal by the OPEC oil cartel and its allies to increase production has added to the upward pressure in prices.
It’s important to note that some of the early rise in gas prices after March 2020 was simply a "return to a more ‘normal’ supply-demand balance" following the extraordinary economic shutdowns of the early pandemic, said Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis.
He added that a significant part of why supply has trailed demand for the past two years is low investment in production during the pandemic, due to uncertainty about how to plan for a recovery.
In the meantime, it's important for everyone "to avoid a U.S. bias," WIlliams-Derry said. "Oil prices are set globally, so there's a tendency to blame U.S. politicians for things that they have literally no control over."
Biden said, "Make no mistake: The current spike in gas prices is largely the fault of Vladimir Putin."
By current, Biden means very current. The most recent spike in gas prices has stemmed largely from Putin’s invasion of Ukraine. Read the full report from PolitiFact.