April 10, 2022

Good morning. More expensive gas could have lasting consequences.

Pumping gas at a Shell gas station in Houston.Brandon Bell/Getty Images

Why gas prices are up

If you were hoping for much cheaper gas anytime soon, I have some bad news: Prices probably won't drop much for at least a few months.

The causes of more expensive gas will most likely be with us for a while. After driving U.S. prices to more than $4 a gallon, Russia's war in Ukraine continues with no clear end in sight. Producers so far seem unwilling, or unable, to pump out enough supply to fill the gap caused by the war.

Source: U.S. Energy Information Administration

When I asked whether any good short-term solutions exist, Tom Kloza, global head of energy analysis at the Oil Price Information Service, gave a simple answer: "No."

For Americans, the immediate effect is that life will simply cost more. We will pay more when we fill up our gas tanks or pay energy bills in the next few weeks or months. The price of many other goods will go up, because so many things — food, iPhones, PlayStations, cars — must be transported at one point or another by a truck, a boat or a plane burning fossil fuels.

Higher fuel prices have broader consequences, too. A push to drill more oil and natural gas, or to more aggressively pursue alternative energy sources, could affect climate change (in good or bad ways). A public angry over the cost of living could protest or vote out the politicians in power. People in the U.S. and other countries aiding Ukraine could begin to wonder whether their support is worth pricier gasoline and other goods.

With the Covid pandemic's retreat, many of us wanted — and expected — some sense of relief after two awful years. Higher gas prices, and broader inflation trends, work against that, as if we are merely trading one crisis for another. And just as with the pandemic, no clear end is in sight.

A refinery in California.Bing Guan/Reuters

Producers vs. low prices

At the onset of the pandemic, demand for fuel collapsed as people stayed home. Once much of the world reopened, demand returned.

But supply has not kept pace, much like strained supply lines have raised food prices and impaired the flow of cars, electronics and other goods. By turning much of the world against a major oil and gas producer in Russia, the war in Ukraine only made supply problems worse.

Some of the supply issues are by design. OPEC Plus, a cartel of oil-producing countries that includes Russia, has worked to keep prices — and therefore profits — as high as possible by limiting supply. The cartel has held fast to its approach.

But it is not just OPEC. American oil companies have deliberately slowed production after a pair of recent fracking boom-and-bust cycles left them with a glut of supply and plummeting prices. "We're having the third boom, and these executives don't want to have the third bust," Kloza said.

All of that leaves few good solutions in the short term. Even if public pressure or a strained market eventually pushes producers to drill more, new production can take months to spin up, especially given labor and supply shortages. And even if U.S. producers step up, OPEC Plus could decide to cut back — to keep prices high.

Other potential solutions that lawmakers have mentioned or enacted, like a gas tax holiday or direct cash relief, could make inflation worse by putting more money in people's pockets and keeping demand high without necessarily increasing supply. "We're not in a position to help households right now because it would cause more inflation," Jason Furman, an economist at Harvard, told me.

Meanwhile, some experts suggested that the best chance of a quick decline in gas prices is an outcome nobody wants: a new Covid variant or a recession tanking the economy and demand.

A cascading problem

Gas prices tend to get disproportionate attention compared to their actual economic impact, Furman said.

One reason for that: The cost of gas is incredibly transparent, posted on giant signs across the country. The visibility can make rising gas prices a symbol for broader inflation trends.

Rachel Ziemba, an energy expert at the Center for a New American Security, said she was worried that higher gas prices will cause social and political instability. Around the world, inflation has already prompted protests and even riots. Higher gas prices in particular have historically led to lower presidential approval ratings, as voters blame those in charge for inflation and bad economic conditions.

Some experts worry that higher gas prices will eventually hurt Western resolve against Russia, if Americans and Europeans start to ask whether supporting Ukraine is worth the price. Recent polls suggest the public is willing to make some sacrifices for the war effort, but polling also shows increasing discontent with inflation.

So the consequences of rising gas prices are not just to your wallet, but also possibly geopolitical.

NEWS

War in Ukraine

Russian President Vladimir Putin and Gen. Aleksandr V. Dvornikov in 2016.Alexei Nikolsky/Sputnik, via AP

Russia named a new battlefield leader in Ukraine, Gen. Aleksandr V. Dvornikov. He has been accused of ordering strikes on residential neighborhoods in Syria.
Russian forces stepped up shelling in eastern Ukraine, while residents sought to flee the region.
Britain's prime minister, Boris Johnson, made a surprise visit to Kyiv.
Britain and Slovakia both announced they were sending weapons to Ukraine, including a long-range S-300 air defense system.
Here's why calls for war crimes trials over Russia's invasion face long odds.

FROM OPINION

Our endless distractions put U.S. solidarity with Ukraine at risk, Maureen Dowd writes.
Liberalism needs nationalism to survive — and religion, too, Ross Douthat writes.
The pandemic showed that we need a new normal that allows vulnerable people to participate in everyday life, Sarah Wildman argues.
In a universe with room for wombats, sea horses and night-blooming plants, there is room for trans people, Jennifer Finney Boylan writes.

The Sunday question: Is Washington's Covid outbreak the price of normalcy?

With vaccines widely available, it's up to individuals to decide whether to attend events like the D.C. banquet that likely became a superspreader event, Dr. Leana Wen argues. Dr. Uché Blackstock disagrees, arguing that mandating precautions would have kept attendees safer.

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MORNING READS

Matt Winkelmeyer/Getty Images for WarnerMedia

Behind the mic: The actress Laverne Cox asked the questions, for a change.

Advice from Wirecutter: How to clean a bird feeder.

Sunday Routine: A "Marvelous Mrs. Maisel" tour guide takes fans to 1950s New York.

A Times classic: The 25 greatest actors of the 21st century (so far).

Don't call it "kamping": The budget campground network K.O.A. is going after the luxury market.

BOOKS

Naima Green for The New York Times

Fighting death: Delia Ephron's new book combines a medical thriller, a cancer memoir, a love story and a heroic journey.

By the Book: Books are like pheromones — they "unite, divide, attract and repel people," the critic Margo Jefferson says.

Our editors' picks: "The Candy House," Jennifer Egan's sequel to "A Visit From the Goon Squad," tells more than a dozen related stories and defies neat summarizing.

Times best sellers: "Ten Steps To Nanette," by the comedian Hannah Gadsby, is new on our hardcover nonfiction list. See all our lists here.

The Book Review podcast: The critic Jennifer Wilson talks about new fiction that highlights how conflict has transformed Ukrainian lives.

THE SUNDAY TIMES MAGAZINE

Illustration by Andrew Rae

On the cover: It's the magazine's money issue. Kick off with nine ways to visualize Jeff Bezos' wealth.

Recommendation: Make the most of April showers by recording thunderstorms.

Unplug: Fantasize about a simpler life via soothing YouTube videos about building huts and fires.

Eat: Yogurty butter beans with pistachio dukkah.

Read the full issue.

NOW TIME TO PLAY

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121 Across: Cocktail often made with Tennessee whiskey, ironically

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Thanks for spending part of your weekend with The Times. — German

Claire Moses, Ian Prasad Philbrick, Tom Wright-Piersanti, Ashley Wu and Sanam Yar contributed to The Morning. You can reach the team at themorning@nytimes.com.