On July 6 the global benchmark for oil slid below US$100 ($139.84) a barrel for the first time since April, raising the hopes of politicians, business owners, and drivers around the world that the days of high fuel prices were coming to an end.
We’re not there yet.
In fact, the underlying dynamics of oil supply and demand point to a prolonged period of higher prices, lasting months if not years. Demand for fuel is still growing as the world picks up where it left off before Covid-19 lockdowns. There’s a shortage of refineries to turn oil into fuel. And the world’s largest oil producers are hitting up against the limits of what they can drill. All this as Vladimir Putin’s war suppresses exports from Russia.