EVEN before the Russia-Ukraine war, the Covid-19 pandemic had brought the world economy into recession. Global oil demand also declined by about 8 million barrels per day in 2020 and 2021. OPEC+ agreed to cut output by 10 million barrels per day from May 2020 to April 2022. This led oil prices to rise to around $75 per barrel in July 2021, which prompted OPEC+ to raise output again at the end of 2021.

Since Russia invaded Ukraine on Feb. 24, 2022, the fear of rising oil prices has escalated globally. Russia accounts for 10 percent of global oil supplies. Western-led sanctions removed this supply from the market, putting pressure on the oil supply-demand balance. The price of crude oil soared from $95.42 per barrel to $127.98 on March 8 before dropping back down to $95.64 on March 16 and jumping back to $111.70 on April 14. The oil price is likely to remain elevated over $100 per barrel throughout 2022. As a result, the gas price — which is indexed to the global oil price — has also experienced wild growth.