When will the "ceiling" be touched when international oil prices rise and rise?

On June 11, the price of gasoline in the United States exceeded $5 per gallon for the first time in history, or about $1.
32 (8.
89 yuan)
per liter.
Moody's agency analysis believes that US oil prices may continue to rise
in the coming weeks.
As oil prices climbed, the US inflation index also reached new highs
.
Data released by the US Department of Labor in June showed that CPI rose 1% month-on-month and 8.
6% year-on-year in May, the biggest increase since December 1981
.
Economic analyst Rick Newman believes that high oil prices will suppress US domestic consumption and drag down GDP (gross national product), and "the clear gasoline price figures on the gasoline price signs on both sides of the road are an important basis for American consumers to understand inflation and economic health"
.

Gasoline prices in the UK also hit new highs one after another, posting their biggest one-day increase in 17 years on June 7
.
Soaring oil prices have overwhelmed people's lives, and more and more Britons are starting to calculate carefully, such as traveling as much as possible, reducing meat and alcohol consumption, buying discounted goods, canceling media subscriptions, etc
.

Along with the price of oil, there is also natural gas
.
Fatih Birol, executive director of the International Energy Agency (IEA), said the world is facing an energy crisis "much worse than the 1973 oil crisis
.
" If this winter is "extremely cold and long", Europe will have to start from the demand side and implement a gas quota supply system
.

Expansion of production capacity: OPEC members are powerless, non-OPEC members are powerless

Reuters believes that the reasons for the continued rise in oil and gas prices are complex, the most important of which is the fluctuation
of production capacity caused by the Russia-Ukraine conflict.

Global oil producers fall into two categories, OPEC countries (OPEC) and non-OPEC countries
.
OPEC is made up of 13 countries including Iran, Kuwait, Libya, Saudi Arabia, the United Arab Emirates and Venezuela, and its oil production accounts for about 40% of the world's
total.
OPEC members adhere to production quotas set by the organization to keep oil prices above
a certain profit level.
In 2016, Russia joined the "OPEC+" mechanism and played an important role
as a non-OPEC country.

Russian oil production is second only to the United States and Saudi Arabia
.
Since the oil produced by the United States mainly meets domestic consumption, Russia is the second-largest crude oil exporter
after Saudi Arabia.
Since the West imposed sanctions on Russia over the Ukrainian crisis, Russian oil production has fallen
sharply.
According to the International Energy Agency, Russia's average production in April was 1.
3 million barrels
per day below the target.
Some analysts believe that Russian oil production may decline by 17%
in 2022.

In response to the energy crisis, OPEC announced in March that it would increase oil supply by 432,000 barrels per day from May, and on June 2 it announced that it would increase oil production to 648,000 barrels
per day.
So far, with the exception of Saudi Arabia, the United Arab Emirates and Iraq, which have spare capacity, all OPEC member countries have almost reached their limits
.
Analysts generally believe that in the global market, increasing the oil supply of OPEC members will not make up for the supply gap
caused by the blockade of Russian oil.

Political turmoil in Libya, another OPEC member, has led to further cuts in global oil production and aggravated the contradiction
between supply and demand.
Libyan oil production recently fell by 1.
1 million barrels
per day as eastern forces expanded blockades of oil fields and closed major ports.
Almost all oil and gas production in Libya has been disrupted, with only the Wafa field in the southwest still operating, but producing only 40,000 barrels
per day.

OPEC members are unable to expand oil production, while non-OPEC members are unable to expand oil production
.
Economic analyst Rick Newman points out that it sounds like a paradox that energy producers lose money when oil prices skyrocket, but such examples are common in the boom and bust cycle of the oil industry, when oil prices skyrocket, energy suppliers expand production; Oil prices plummeted as supply increased, and producers lost money with it
.
Take 2020 as an example, the US energy industry was already in a state of overproduction, and the oil market fell to the bottom after the outbreak of the new crown pneumonia epidemic, and companies even had to sell
at a loss.
Many companies are so reluctant to repeat the painful experience that they dare not repeat it
.

"Actually, too high oil prices are bad for us
.
" Mike Worth, CEO of Chevron One of the world's largest multinational energy companies, recently said, "In our industry, demand always becomes faster
than supply.
”

Biden's "real needs" triumph over "ideology"

The outlook for the Russia-Ukraine conflict is not clear, and the international oil price rise curve shows no signs of
falling.
With growing grievances in the United States and the days of the midterm congressional elections approaching day by day, under increasingly heavy internal and external pressure, President Biden finally stepped down from the "moral high ground" and tried to shake hands and make peace
with the "enemy".

According to the Associated Press on June 6, the US government may lift some oil sanctions against Venezuela from July, including allowing Italy's Eni Group and Spain's Repsol to import crude oil from Venezuela and sell it to Europe
.
The U.
S.
government said the easing of some economic sanctions on Venezuela was aimed at "encouraging negotiations between Venezuelan President Maduro and opposition Guaidó.
"

The rope that the United States has put on Iran also seems to be quietly loosening
.
In April, Greece seized a Russian-flagged Iranian tanker carrying 115,000 tons of oil "under the U.
S.
Sanctions Act"; on June 3, Greece said it would hand over the tanker to the US government; and on June 14, the situation changed again when the Greek government released the ship and returned the oil to its owner
.
The Times of Israel quoted news from the world's largest independent crude oil trader Victor Group on June 5 as saying that even if the Iranian nuclear agreement is not resumed, the United States may allow Iranian oil to flow into the global market
.
Mike Mueller, head of Asia at Victor Group, said that if the issue of lowering oil prices dominates the US midterm elections, then the US government may "turn a blind eye"
to Iranian oil exports.

The Saudi-led OPEC has also refused to take sides in U.
S
.
and Western sanctions against Russia.
At most OPEC meetings, members have avoided discussing the Russia-Ukraine conflict, arguing that it is a political issue rather than a market one
.
Al Jazeera pointed out that Russia's relationship with OPEC is economically and politically important for OPEC, especially Saudi Arabia and the United Arab Emirates
, key OPEC members.
It is the strengthening of ties with Russia that has allowed the two major oil exporters to tighten their grip on the world crude oil market while reducing their dependence
on Washington.

The intensifying energy crisis has forced Biden to rethink his attitude
towards Saudi Arabia.
According to Business Insider, the United States is reconsidering strengthening military protection in the Gulf region and discussing a security strategy agreement
with the United Arab Emirates.
The White House confirmed on June 11 that Biden would visit Israel and Saudi Arabia
in mid-July.
Although Biden claims that he "will not change his views on human rights", Business Insider believes that Biden's "180-degree turn" shows that he is willing to put practical interests above
personal ideology as long as it can "bring peace and stability to the United States.
"

Whether international oil prices will continue to rise

Although the US government lost "face", it changed back to "Lizi"
.
On June 2, OPEC announced that it would increase its daily oil production to 648,000 barrels
from 432,000 barrels previously.

Saudi Arabia will reduce supply of crude oil contracts for July to five "North Asian refiners," four of which are located in China
, Reuters reported on June 10.
At the same time, Saudi Arabia will fully supply crude oil to three other North Asian refiners and one South Asian refiner, and increase crude oil supplies
to Malaysia.
A Singaporean oil trader told Reuters that "Saudi crude oil is very tight in the market"
.

India, Turkey and China have increased their crude imports from Russia, especially India
.
Before the outbreak of the Russian-Ukrainian conflict, India imported only 2%-5% of its crude oil imports from Russia each year, but in recent months, this proportion has increased
significantly.
India imported 11 million barrels of crude oil from Russia in March, 27 million barrels in April and 21 million barrels in May, compared with only 12 million barrels
in 2021, according to commodity data firm Kpler, according to commodity data firm Kpler.

In contrast, European energy imports to Russia are declining, and crude oil imports from the United States, Norway and Africa have reached record highs
.
European Council President Charles Michel said a few days ago that after the EU implements the sixth set of sanctions against Russia, 75% of the EU's oil imports from Russia will be affected; By the end of this year, EU imports from Russian oil will be reduced by 90%.

Analysts point out that the Russian-Ukrainian conflict and US and Western sanctions against Russia have upended the entire global oil supply chain - Europe looks to the West, while Russia looks to the East
.

Ongoing geopolitical conflicts have pushed global oil prices higher
.
When will oil prices touch the imaginary "ceiling"? Bloomberg believes that while impressive numbers are often sky-high, people should be more concerned about how long
oil prices will stay high.
The oil crisis will not end
in 2022.
The oil crisis will almost certainly last into next year – that is, oil prices may rise
again.