Why are Gas prices in America rising when it barely uses oil sourced from Russia?
The effect of war between Russia and Ukraine has affected the Russian oil prices to a large extend. This effect can be seen in Asia and Europe, the countries where Russia exports the oil, as well as other countries like USA. We cant look at American gas prices in isolation; it is important to understand the global supply chain for oil as well. Oil prices are dependent a lot on the global requirements as the global commodity market is interconnected. Therefore, disturbances in one part of the world affects the overall price scenario. Currently, Russia exports the largest volumes of oil globally. The export of Russia in December 2021 was 8 million oil barrels and oil products, out of this there were 5 million crude oil barrels. Out of these, the export to USA was meagre 90,000 barrels in December 2021, therefore the over-all supply to USA is substantially low. As the nature of business, the oil prices are controlled by the global commodity market. Due to lower supply,...