After two weeks of silence in detailing how it would react to the G7 oil price cap, overnight the Kremlin raised the stakes for the west when state-run Tass news service quoted Deputy Prime Minister Alexander Novak as saying that Russia may reduce output by 500,000 to 700,000 barrels a day in response to the cap.
Oil Prices Jump After Russia Says It May Cut Production
Tag: WTI
Domestic Crude Oil Peaked at $145 a Barrel in 2008. It Closed Yesterday at $118.50. So Why Is Gas at the Pump at All-Time Highs?
Part of that, as the above stories illustrate, is just plain ole price gouging. But the big picture is more complicated than that. According to the EIA, in addition to the 61 percent of the price of a gallon of gas that comes from the cost of crude oil, the other 39 percent shakes out as follows: the costs of refinement (14 percent), distribution and marketing (11 percent), and taxes (14 percent).
And refining* looks to be a particular problem right now. The EIA reports that as of January 1, 1982, the U.S. had 301 refineries in operation. That compares to just 129 in operation as of January 1, 2021.
Related:
*Chevron CEO says there may never be another oil refinery built in the U.S.
Previously:
More Oil From U.S. Strategic Petroleum Reserve Heads To Europe
Ms. Cat’s Chronicles 