Oil and gas prices are surging, hitting highs not seen in at least seven years thanks to a combination of factors that have escalated over the past year since President Biden took over the White House.
Gasoline prices at the pump are topping $3 a gallon. The national average price is $3.31. That's $1.07 more per gallon than Americans were paying a year ago.
Some analysts are blaming pandemic-related supply backups and Hurricane Ida. Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday the latest increase comes as the cost of crude oil rises and demand goes up in Europe where refineries are switching from burning gas to oil-based fuels.
"The problems continue to relate to a surge in demand as the global economy recovers, combined with deep cuts to production from early in the pandemic," Patrick De Haan, head of petroleum analysis for GasBuddy.com told Fox Business. "If Americans can't slow their appetite for fuels, we've got no place for prices to go but up."
Nationwide, the highest average price for regular-grade gas is in the San Francisco Bay Area, at $4.55 per gallon. The lowest average is in Houston, at $2.77 per gallon.
According to the survey, the average price of diesel also jumped 11 cents to $3.45 a gallon.
U.S. oil prices are also going over $80 a barrel, a high not seen since 2014.
De Haan said U.S. gas prices were pushed to their highest point in seven years due to "OPEC's decision not to raise production more than it already agreed to in July."
That decision "caused an immediate reaction in oil prices, and amidst what is turning into a global energy crunch, motorists are now spending over $400 million more on gasoline every single day than they were just a year ago," the analyst continued.
Only eight states – Oklahoma, Mississippi, Texas, Arkansas, Louisiana, Kansas, Alabama, and Missouri – have average prices under $3 a gallon, he added.
Biden Policies Undermine US Oil Supplies
President Biden has urged OPEC to increase its output as critics point out he's the one who cut back America's domestic oil production by shutting down the Keystone Pipeline and putting a moratorium on new drilling leases.
In a recent op-ed for Forbes, Dan Eberhart, the CEO of Canary, LLC, a provider of oilfield services to oil and gas companies throughout the U.S., said Biden has been caught flatfooted by the rising energy prices and the big question is what his administration plans to do about it.
He also warned that potential damage to the oil and gas industry can be found in Biden's $3.5 trillion budget reconciliation bill. Democrats plan to increase taxes on oil producers' royalties.
Eberhart explained how Biden's climate policies have also contributed to the rise in energy prices.
"Between 2011 and 2014, consumers tolerated an average price of $107 a barrel. This dropped to $57 a barrel in the subsequent five years through 2019 largely because of the boom in America's shale oil patch, which added vast amounts of non-OPEC supply that tempered prices," he wrote. "However, the Biden administration and Wall Street concerns about the low-carbon energy transition have put shackles on shale."
"The Biden administration could improve the investment climate around shale by ceasing its attacks on the oil industry," Eberhart explained.
The oilfield services company CEO also predicted that the demand for oil will continue to grow through 2030 even if the world adopts aggressive climate policies.
"The energy transition will take place over decades, not a few years. Washington can't lose sight of this fact," Eberhart noted.
"The U.S. oil industry will be needed to meet this demand unless we want to turn over total control over the global oil market to OPEC, as we did in the 1970s. Biden has already resorted to pleading with OPEC producers to add supply even though he has hands on the controls of the world's largest oil and gas producing nation," he wrote.