Oil will be high for a while

[sunsilk]

I think a lot of people still dont know that the price of a petrol they see at gas station is formed by almost 50% of a tax; exchange rate, marketing, company margin are also included in the price you see. For example if oil price doubles during night, fuel price should not double as well (however government and companies does not care about that and increase fuel price by what they want).

I agree, there's so much tax until the petrol we consume goes to the gas station. There goes the refinery, the logistics and from importing it.

And that's why we as consumers are the ones who are shouldering it. Because we pay for the taxes to the government and to whoever imports it.

So much for a consumer to pay and the policies for each country might be different but the countries which imports it really is going to take on that effect.

Lucky people who lives in a country with its own oil supply and security.

[iv4n]

To expect that once the war ends, everything will go back to how it was before would be foolish. It will take a while for everything to go down low, if things were to bounce back to what we used to consider normal.

It would be foolish to expect anything... Most likely, things will never go back to "how it was before". Prices will hold some levels, but in the long run, they will simply continue to rise due to several reasons... oil price is just one of them. I guess that all we can do is to accept the "new normal" & to try to adapt. Maybe we will have to earn more, but if that is not possible, we will have to cut some expenses & maybe change some habits.

[Kelvinid]

Oil will no longer return to its normal price, war may end but the oil price will always be high, although not as high as today. Its like this is already the new normal, along with other stuffs that are also in high prices due to its high demand as well.

So let's not assume that oil will only be high for a while. Let's just accept the fact that this is also part of inflation, although we all know the main cause why its price turns suddenly high.

For now, instead of complaining about the war and its negative effects, let's just focus on increasing our income as there's no other way to survive with all these high priced life's commodities.

[xLays]

Fuel prices here in the Philippines are causing serious disruption lately. Gasoline used to cost around ₱50 ($0.80) per liter, but now it has climbed to over ₱80 ($1.35), which is more than a 50% increase.
Our government has taken some action by providing financial aid of about $100 to certain sectors like taxi drivers and motorcycle drivers. However, if you are an ordinary worker outside those categories, you basically receive nothing.
As expected, the increase in fuel prices has also pushed the cost of basic goods higher, making daily expenses even more difficult to manage.
How about in your country? How much impact has the rise in gasoline prices had there?

[STT]

Commodity inflation over the next decade is a given imo, I already thought that from the year start.  Its just a case how it develops and triggers as a trend, a giant war will do that quite easily.
  Problem is how many industries are related to the oil price, also there are some related products from that same area.  Helium while still an energy product in theory is used from medical usage through to factory production of electronics and its at such a high level that nothing can substitute that supply hence production will slow or stop completely causing prices to rise.
   Inflation all round is already all round a given considering a great weakness in currency across many countries.

[Reatim]

Lucky people who lives in a country with its own oil supply and security.

countries with reserves are lucky. it might not last forever but it can carry them for quite a while. on the other hand, other countries in the middle east are not so lucky because they are also affected and their citizens are at risk of bombing.

[Renampun]

This war has caused global oil prices to rise and as a result we will likely see inflation that will occur due to rising energy costs that impact almost all sectors, in fact this will probably continue even though there are several options that countries might take to be able to reduce oil prices, but this war certainly makes everything more difficult than it should be and even though everything will subside eventually, it will take more time to recover and return to normal, and at that time we can only hope that we can survive this situation.

[fruktik]

There's another nuance. Oil companies also don't benefit from keeping oil prices high. Sounds paradoxical? Of course. The point is that people practically everywhere in the world are switching to electric cars. At these prices, even more people will choose electric cars over those with internal combustion engines. Recently, reports came out of Germany that they've already begun to abandon internal combustion engine cars in favor of electric vehicles. That's the point. Therefore, in any case, oil companies will need to dump a huge number of barrels of "black gold" onto the market.

[BALIK]

Oil will no longer return to its normal price, war may end but the oil price will always be high, although not as high as today. Its like this is already the new normal, along with other stuffs that are also in high prices due to its high demand as well.

So let's not assume that oil will only be high for a while. Let's just accept the fact that this is also part of inflation, although we all know the main cause why its price turns suddenly high.

For now, instead of complaining about the war and its negative effects, let's just focus on increasing our income as there's no other way to survive with all these high priced life's commodities.

If I remember correctly, the price of oil before the Russia-Ukraine war was only around $80-90. When the war broke out, oil prices soared, at one point reaching nearly $140. But over time, prices dropped and at times fell below $80, even lower than pre war. Therefore, it would be incorrect to say that oil will remain high even after the war end.

But interestingly, even when oil prices fell again, many other commodities did not, and I dont understand why.

You are right, let's not complain too much about the war and what's happening because we can not do anything but adapt. So let's focus on increasing income to cope with those crises.

[fruktik]

If I remember correctly, the price of oil before the Russia-Ukraine war was only around $80-90. When the war broke out, oil prices soared, at one point reaching nearly $140. But over time, prices dropped and at times fell below $80, even lower than pre war. Therefore, it would be incorrect to say that oil will remain high even after the war end.

But interestingly, even when oil prices fell again, many other commodities did not, and I dont understand why.

You are right, let's not complain too much about the war and what's happening because we can not do anything but adapt. So let's focus on increasing income to cope with those crises.

After the war began, oil prices skyrocketed. Some people profited greatly from this. Wars don't just start out of nowhere. Some profited handsomely and became even richer, even appearing on the Forbes list. You can track all of this in a few minutes, and you can see who the beneficiaries are.

Afterward, a huge number of barrels were dumped onto the market, which led to a decline in prices. You could even say the exchange rate stabilized for a while.

Why do you think things won't return to normal? On the contrary, countries will adopt a new supply model that bypasses the Omurz Strait. There are some options, though. Therefore, I'll be bold and predict that prices will fall to $50-60 per barrel in a few weeks.

[Zlantann]

Oil will no longer return to its normal price, war may end but the oil price will always be high, although not as high as today. Its like this is already the new normal, along with other stuffs that are also in high prices due to its high demand as well.

So let's not assume that oil will only be high for a while. Let's just accept the fact that this is also part of inflation, although we all know the main cause why its price turns suddenly high.

For now, instead of complaining about the war and its negative effects, let's just focus on increasing our income as there's no other way to survive with all these high priced life's commodities.

It will definitely go back to normal when the market stabilises. But the problem is that it will take some time for the market to return to normal. Some oil and gas facilities have been destroyed during the war. There have been reports of multiple explosions in many facilities in the Middle East. Iran has targeted many such facilities while the US and Israel keep destroying Iranian oil infrastructure. Several oil vessels have also suffered damage that will affect the recovery of supplies.

Some of these oil firms are under financial obligations like loan repayments and so on. This conflict might make them default on the repayment plans. They would also need to seek other financial assistance to continue operations if the war ends. It's going to be a long and expensive recovery process. And the earlier the war ends the easier the recovery would be.

[colinistheman]

There's another nuance. Oil companies also don't benefit from keeping oil prices high. Sounds paradoxical? Of course. The point is that people practically everywhere in the world are switching to electric cars. At these prices, even more people will choose electric cars over those with internal combustion engines. Recently, reports came out of Germany that they've already begun to abandon internal combustion engine cars in favor of electric vehicles. That's the point. Therefore, in any case, oil companies will need to dump a huge number of barrels of "black gold" onto the market.

Your argument is partly true that people will switch to electric vehicle if oil prices rise too high and remain high for an extended period. However, the oil supply is not solely for transportation and regular consumer. The majority of oil supply is used for aviation, shipping, and industrial purposes. So, oil and gas companies will benefit greatly from high oil price

According to the news I have read, Russia has earned over $7 billion in just a few day since the Iran war broke out.
https://kyivindependent.com/russia-earns-additional-6-billion-euros-in-fossil-fuel-revenue-as-oil-prices-soar-amid-us-iran-war-analysis-finds/

[Spaceman1000$]

Oil will no longer return to its normal price, war may end but the oil price will always be high, although not as high as today. Its like this is already the new normal, along with other stuffs that are also in high prices due to its high demand as well.

So let's not assume that oil will only be high for a while. Let's just accept the fact that this is also part of inflation, although we all know the main cause why its price turns suddenly high.

For now, instead of complaining about the war and its negative effects, let's just focus on increasing our income as there's no other way to survive with all these high priced life's commodities.

No I disagree with you, when the price of oil goes high, it has a ripple effect on the economy, this ripple effect affects productivity, it affects transportation, gives a shockwave to the economy because most times government were not prepared for it as fiscal policies might not be on ground to curtail it. So if tell people to increase their income, you are literally telling the government not to tackle the issue head on.

[Darker45]

Of course. It's not as if the depots, rigs, refineries, tankers, and whatnot are fully restored as soon as the bombs stop flying. It's not as if the oil and logistic companies are back in full operation as soon as the warring parties involved agree to a ceasefire. It will take time for things to settle down and get back to normal.

But even in the middle of the war stakeholders are already finding ways to address the rising prices of oil. Production in other countries are increased significantly. Gates are opened for huge reserves to find their way to the market. I hope things would get a little better despite the conflict dragging on for more days and weeks.

[MarjorieZimmermanGinger]

War negatively impacts many things. One of them is oil prices. Rising oil prices mean higher prices for many other things as well. Problems in transportation and production often lead to price increases.

Post-war economic recovery can also take a long time. Changes in oil prices will continue to be affected by the progress of the war. I hope the war ends as soon as possible.

When oil prices rise, the need for transportation as a vital means will also experience problems and can also influence the impact of other price increases for certain business sectors that require oil as a raw material for production. Economic recovery may not occur immediately after the war ends, but it is much better if the war does not escalate to a much larger scale because economic pressures can also determine future inflation rates.

Everyone hopes the war will end so that economic recovery in affected countries can slowly resume. Countries that consider themselves to have resources will see this issue as a step to expand their influence, but the impact of war can create much bigger problems for certain countries and this does not solve the problem but will cause other problems.

[ZAINmalik75]

No one knows for how long this war can go on. It can be weeks or months. But a lot of people seem to think that once the war ends, everything will go back to normal. That is not the case. Oil prices are going up now and for every day that companies struggle to operate, the closer they are to bankruptcy. Maybe the big companies would be fine but even them are struggling. To expect that once the war ends, everything will go back to how it was before would be foolish. It will take a while for everything to go down low, if things were to bounce back to what we used to consider normal.

The way these countries are destroying oil reserves and refineries, things are definitely going to take a lot of time in the coming year. But they are already trying to show the world how important the reserves were, which were just destroyed by Israel and the US. The rates are now even higher than $115, which is going to be very expensive for all of us in the upcoming days. Also, the recent attack on Iran has made them attack other gas facilities in Arab countries.

Things are not slowing down, and I hope they are emptying their oil reserves. If they are not, then we are definitely going to see a hell of a shortage. Governments are already taking steps to make things a bit easier, like making schools and educational departments take online classes, and also suggesting the corporate world manage work from home setups, because sooner or later they will be forced to do that.