Russian forces have invaded Ukraine and, while the crisis may seem a world away, it’s hitting Aussies at the fuel pump.
This is because Russia is one of the largest oil-producing countries in the world, and the crisis is causing supply disruptions.
Dr Robert Aguilera, energy economist from Curtin University, told Yahoo Finance the current conflict was a major factor in what we would be paying at the pump.
“If the conflict results in a significant disruption of crude oil supply, petrol prices could rise even further,” Aguilera said.
Currently, petrol prices are at their highest, topping $2 a litre in some parts of the country.
“In the coming weeks, motorists will have to put up with high prices, but I believe there’s relief in sight within a few months,” Aguilera said.
When will prices ease?
Aguilera said there were large amounts of new oil supply expected from most of the largest oil-producing countries.
“This includes Iran, whose oil exports have been restrained due to sanctions that will likely be overturned soon by the US,” he said.
Not only that, but Aguilera said despite the current situation, Russia was usually reliable in its production because it was so reliant on the money it made from exporting.
“Crude oil prices should come down,” he said.
“A slowdown of global economic growth will suppress oil consumption, while production should rise continuously through 2022.
“The result is an oversupplied market, which exerts downward pressure on oil prices and ultimately on petrol.”