Event Banner

More pain at the pump: U.S. crude oil prices hit seven-year high


U.S. crude oil prices per barrel rose to their highest level since 2014, indicating a higher demand for fuel and travel, despite the Omicron surge, as well as the serious impacts of President Biden’s anti-fossil fuel agenda.

Quick Facts

West Texas Intermediate, the main grade of U.S. crude oil, rose to a cost of $85.43, an increase of $1.61 per barrel. This marks the highest price ever for crude oil in the U.S. since the shale-induced oil crash of 2014.

The price increase comes as geopolitical tensions threaten global supply. Oil prices have been rising steadily after 2020’s coronavirus crash when U.S. crude futures turned negative. Oil demand is also incredibly high. The Organization of the Petroleum Exporting Countries (OPEC) forecast in a recent report that global oil consumption stood at 100.8 million barrels per day to start the 2022 fiscal year, up 4.2 million barrels per day from 2021, driven by “light distillates in the petrochemical industry.”

Although the Biden administration sought to relieve fuel prices across the country by releasing crude oil from the Strategic Petroleum Reserve in the fall of 2021, fuel prices currently average $3.31 per gallon, compared to $2.38 per gallon a year ago, and continue to rise. Rising fuel costs are compounding the daily living expenses that are skyrocketing due to inflation, the growth of which may be tied to the administration’s coronavirus relief package, passed in March 2021. 

Paul Horsnell, head of commodities strategy at Standard Chartered, stated, “The market perceives a capacity crunch could happen later in the year and is trying to get ahead of that.” He also warned that traders are concerned that crude exports from Russia could take a hit as a result of tensions with the U.S. over the potential Russia-Ukraine border conflict.

The same OPEC report showed that the spread of Omicron has had less of an impact on crude oil demand than was expected, as forecasts were raised by 260,000 barrels per day during the fourth quarter of 2021. Additionally, Francisco Blanch, head of commodities and derivatives research at Bank of America, thinks the price of Brent crude, the international benchmark, could skyrocket as high as $120 per barrel in 2022, despite the fact that the world is using less oil than it was just prior to March 2020. 

Ultimately, the surge in fuel prices is being driven by the basic market law of supply and demand, as demand for crude oil has snapped back faster than production, causing prices to rise. In addition, OPEC has agreed to only slowly increase the output of crude oil after engaging in production cuts, contributing to sky-high fuel prices.

The incredibly high demand for fuel shows that most Americans aren’t heeding the fear and paranoia perpetuated by progressive politicians and the mainstream media and are continuing to live their lives as normally as possible, as demonstrated by the increase in the number of Americans traveling over the holiday and the projected increase in travel for the rest of 2022.

The recent surge in the cost of U.S. crude oil simply serves to underscore the reality that hardworking Americans have been feeling for months now — prices at the pump are way up.  President Biden’s radical anti-fossil fuel agenda is having real-world consequences, and those are being felt the most by the American working class. 

President Biden’s commitment to radical policies like the Green New Deal has had a significant impact on life in the U.S. From canceling the Keystone XL Pipeline to letting Russia secure their pipeline with Nord Stream II, this administration has done everything it can to undo the legacy of American energy independence that President Trump left just a year ago.

Bonner Cohen, a senior fellow with the National Center for Public Policy Research, debunks the climate alarmism sitting at the center of Biden’s policy prescriptions: “In subordinating American energy independence to a quixotic effort to micromanage the planet’s climate, the Biden administration is engaging in a folly of breathtaking proportions.”

From a Christian perspective, God has given this planet, and all of its abundant natural resources, to mankind as a gift to be used and stewarded for our good and His glory. The energy generated by the use of fossil fuels has lifted countless millions out of poverty and extreme inclement conditions which had previously contributed to life being “solitary, poor, nasty, brutish, and short,” as Thomas Hobbes observed.

As Americans buckle up for more pain at the pump and in their wallet, one can only hope and pray that this administration pursues more reasonable policies, reigniting the spark of American energy development and independence. Until then, it’s going to be a dark winter for the working class in our nation.