Why Have Gas Prices Dropped? – Gas prices reached a record average price of $4.33 per gallon on March 11, beating a record of $4.10 set in 2008. It came after more than a year of steady price rises, and following an announcement from the Biden administration that the United States would implement a ban on the importation of Russian crude oil.
However, ongoing discussions between Ukraine and Russia – along with reports that the Russian military may be losing steam in Ukraine – have resulted in a slight drop in prices of both crude oil and gas.
The national average for a gallon of gasoline fell to $4.25 on Monday.
American Automobile Association spokesman Andrew Grossman said that typically at this time of year there is an increase in gasoline demand as the temperature gets warmer and more people take to the road.
“But we had a slight drop in demand last week, which may be due to higher pump prices. In our new survey of drivers, 59% said they would change their driving habits or lifestyle if the cost of gas hit $4 per gallon. And if gas were to reach $5, which it has in the Western part of the country, three-quarters said they would need to adjust their lifestyle to offset the pump price,” Grossman said.
According to UBS analysts, the recent fall in crude oil prices “reflects easing fears of further supply disruptions based on ceasefire talks between Russia and Ukraine.”
There is, however, more to this story.
India Purchases Discounted Russian Oil
There are also reports that India has purchased discounted Russian crude oil supply, freeing up supply for the United Kingdom, United States, and Canada, where Russian import bans have been implemented.
India has not responded to the Russian invasion of Ukraine with any sanctions or diplomatic communication, instead choosing to remain neutral in the conflict.
Indian Oil Corp, the biggest oil refiner in the country, purchased three million barrels of discounted Russian crude oil through a Dutch energy and commodity trading company last week. The delivery of the oil is expected in May, freeing up some supply for the U.S., Canada, and the U.K. in the near term – and giving valuable time for the negotiations between Ukraine and Russia to play out.
An additional purchase of two million barrels of Russian crude oil was also made by a different Indian oil refiner.
White House Press Secretary Jen Psaki called on India this month to “think about where you want to stand when history books are written.”
However, India’s neutrality – which has, in some ways, undermined Western efforts to hit the Russian economy as hard as possible – may also save President Joe Biden from adopting radical measures to reduce oil usage and prices in the United States.
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and report on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.
