Rising oil prices are also a threat to policies aimed at curbing climate change. As prices rise at the pump, some lawmakers and voters may become more willing to support increasing oil and gas production, seeing it as a more immediate solution to high energy prices than investing in, say, renewable energy and electric cars.
“This is a huge watershed for governments trying to manage the energy transition and energy security simultaneously,” said Mr. Goldwyn, the former Obama administration official. “The need to have adequate reserves of oil and gas and diverse sources of supply is more urgent than ever during an energy and geopolitical crisis.”
Some energy analysts said that high prices might not persist for that long. That’s because people may seek to reduce their expenses by, for example, driving less or switching to more efficient vehicles and appliances. A report on Monday by analysts at RBC, an investment bank, forecast that oil prices could reach $115 a barrel or higher this summer. It added, “The oil cycle will price higher until it finds a level of demand destruction.”
The recent jump in gasoline prices comes at a time of year when people tend to drive less. To some energy experts, that is a worrisome because a seasonal upswing in prices is not that far away.
“Not only are oil prices up, but the bulk of the nation is starting the multi-month transition to summer gasoline, further adding to the rise at the pump,” said Patrick De Haan, head of petroleum analysis at GasBuddy, a technology company that tracks fuel prices.
A diplomatic settlement, of course, would relieve the pressures and energy prices would go down.
“Average prices in 2022 could be lower than 2021 with more supplies from the United States and the Gulf, including Iran,” said René Ortiz, a former secretary general of OPEC and former oil minister in Ecuador. “That is the best scenario and I think diplomacy will prevail. It would be crazy for Putin to invade.”