Oil prices explode to near record highs; gas prices already there

United States Secretary of State Anthony Blinken floated the idea of implementing an embargo against Russian oil this weekend, which was met with an immediate reaction as commodity futures began trading Sunday night. At one point, prices soared limit up, near 12 percent. Brent Crude, which sets gasoline prices, touched $139 per barrel.

Already, war between Ukraine and Russia had caused a surge in prices. The cost at the pump in the Copper Country is at $4.07 per gallon as of Monday morning according to AAA Michigan. Many stations are posted prices 15-20 cents higher as of 10 AM. AAA says Michigan saw the largest increase in average gas prices in the country for the week ending March 3rd, up 39 cents from seven days prior.

National production was curtailed during the recession. A glut of oil hit the market at a time when few people were driving thanks to lockdowns, causing the value of a barrel of oil to go below zero. Much of that capacity has yet to come back online. AAA says this is also a factor. “Additionally, EIA [the Energy Information Administration] reported that total domestic crude stocks decreased by 2.6 million bbl last week to 413.4 million bbl. The current stock level is approximately 15 percent lower than at the end of February 2021, contributing to pressure on domestic crude prices.”