Posted on: 02. 25. 22
While Pro-Gas, LLC isn’t in the business of interfering with global politics, there has been recent geopolitical power plays that we know could have a significant impact on the oil and gas prices at international and domestic levels.
While prices have already gone through a rollercoaster ride over the last couple of years, current events between Russia and Ukraine put the industry on course for further market turbulence.
Let’s take a look at how often geopolitical events impact our industry, what the latest actions mean for our oil and gas supply, and why we think the United States could mitigate a cost crunch in the coming months.
Geopolitical Situations Commonly Affect Oil and Gas
Keep in mind that the biggest influencer of oil and gas prices is supply and demand. Therefore, when geopolitical situations arise and sanctions begin to cut off supplies to certain parts of the world, supply and demand can drastically fluctuate.
Unfortunately, geopolitical tensions are common throughout the world and their impact can eventually lead to increased prices at the local gas pump.
What the Russia, Ukraine Incident Means for Global Prices
Just this week, tensions between Russia and Ukraine came to a head and some of the first shots of the latest geopolitical incident were fired.
Since the world has been buzzing about these rising tensions throughout the month of February, oil prices and the costs of other precious imports have begun to increase.
After the first round of attacks during the Russia, Ukraine conflict, oil prices have already risen to $105 dollars per barrel. Not only do these increased prices create a natural rise in energy costs, but nations like those in the UK that heavily rely on Russian oil could experience a severe supply crisis if drastic sanctions are put in place.
Will Russia’s Actions Influence Prices in the United States?
Although Russia accounts for 1 in 10 barrels of oil distributed around the world, the United States is still a massive global player in the oil and gas industry.
According to industry reports, in 2020, Russian oil only accounted for 7 percent of the United State’s consumption.
In fact, much of our oil comes from domestic sources and our neighbors to the North, Canada. So, while the potential increase of $105 per barrel may seem like a looming figure, the cost crunch could really only sting a bit, rather than cripple our access to oil for general consumption.
Keep Your Production Facility Up-to-Date With Pro-Gas, LLC
If you are the manager of an oil and gas production facility, you want to be up-to-date on the latest news as well as the latest equipment in the industry.
Pro-Gas, LLC is dedicated to providing both to our customers and guarantees the best possible rates on essential equipment like fuel conditioners and mobile storage units.
Reach out to us today to learn more about our current product availability and how our quality equipment can help your production facility improve domestic production during tense times.
