{"id":11743,"date":"2022-06-09T12:45:28","date_gmt":"2022-06-09T12:45:28","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=11743"},"modified":"2022-06-09T12:47:11","modified_gmt":"2022-06-09T12:47:11","slug":"will-russian-oil-ban-send-gas-prices-even-higher","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/will-russian-oil-ban-send-gas-prices-even-higher\/","title":{"rendered":"Will Russian Oil Ban Send Gas Prices Even Higher?"},"content":{"rendered":"\n<p><em>Francis K. from Salem, OR asks: <\/em>Hello Mitch, my question relates to recent news that Europe is banning Russian oil. This feels like big news that could disrupt oil prices and send gas prices even higher. Is this something we should prepare for?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thank you for emailing your question. There was indeed some significant news coming from the European Union recently. A month or two ago, the idea of the EU banning Russian oil seemed like a far-off possibility, given the bloc\u2019s reliance on Russian imports. But the ongoing war has changed the EU\u2019s stance.<sup>1<\/sup><\/p>\n\n\n\n<p>In late May, the EU announced it would implement a \u2018phased\u2019 Russian oil ban, which will take place over the course of 2022. The EU will start by blocking all Russian crude and refined fuels that arrive on ships, with a carve-out for pipeline oil (to appease landlocked Hungary). Germany and Poland have pledged to stop buying oil that arrives via pipeline by the end of the year, however, which will effectively sanction 90% of Russian oil imports by the end of 2022. That\u2019s pretty huge. The EU also took the bold step of blocking insurance companies from covering cargo ships carrying Russian oil, which is meaningful given that European insurers cover most of the world\u2019s oil trade.<\/p>\n\n\n\n<p><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_06_09&amp;content=volatility_can_be_good_guide\"><strong><u>Learn How to Use Market Volatility To Your Advantage!<\/u><\/strong><br><\/a>\u00a0<br>Downside market volatility is challenging for just about every investor, especially now, as oil and gas prices rise. But, for all the worry and discomfort it often causes, did you know there are also several positive aspects of volatility?<br>\u00a0<br>If you have $500,000 or more to invest, get our free guide, <em>\u201cUsing Market Volatility to Your Advantage,\u201d<\/em> and learn our insights, based on decades of experience, about how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time.<br>\u00a0<br>You\u2019ll get our ideas on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_06_09&amp;content=volatility_can_be_good_guide\">Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<sup>2<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>Oil prices have already been moving sharply higher, given tight supplies caused by a resurgence of demand following global lockdowns \u2013 which was also when oil production fell off a cliff. Global oil markets also lost quite a bit of refining capacity during that time, which is one of the key drivers behind higher gas prices. With Russian oil increasingly coming off the market, global supplies stand to get even tighter, which would argue for crude oil prices remaining elevated for some time.<\/p>\n\n\n\n<p>There are some supply\/demand crosscurrents in the oil markets, however, that may help prices. Just days after the EU\u2019s big announcement, the nations in OPEC+ reached an agreement to raise output by 648,000 barrels a day in July and August, which marks a 50% increase in production from previously announced plans. To be fair, just about every member of OPEC save for Saudi Arabia and the United Arab Emirates are already pumping at capacity, so these increased production targets are not necessarily the solution everyone is hoping for. The U.S. and Canada will also need to step-up production to fill the deficits in global oil supply, which is something we\u2019re starting to see now.&nbsp;<\/p>\n\n\n\n<p>As far as whether these issues in global oil markets will continue to affect gas prices, I would say the answer is yes \u2013 you should continue to prepare and budget for elevated gas prices this year. I think markets have largely priced all of the supply\/demand issues facing the oil trade in 2022, absent some new positive or negative surprise. So, I do not envision oil and gas prices moving materially higher from the levels they are at now if that is any consolation. The world lost a major oil producer in Russia, and it takes time for new supply to come online to make up the deficit. The upshot \u2013 sort of \u2013 is that the pain of higher prices in the short term is also a motivation for producers to pump more, which should ease price pressures given some time.<\/p>\n\n\n\n<p>In the meantime, I recommend that investors use market volatility to their advantage. To help you, I am offering all readers our guide, \u201c<em><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2022_06_09&amp;content=volatility_can_be_good_guide\">Using Market Volatility to Your Advantage<\/a><\/strong><\/em>.\u201d<sup>3<\/sup> This guide will help you learn our insights, based on decades of experience, about how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time.<br>\u00a0<br>You\u2019ll get our ideas on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download this free guide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While the EU&#8217;s phased oil ban will certainly affect oil prices, there are other factors that could lessen its impact. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-11743","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=11743"}],"version-history":[{"count":5,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11743\/revisions"}],"predecessor-version":[{"id":11748,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11743\/revisions\/11748"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=11743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=11743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=11743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}