These are geopolitical events that are driving energy prices.Former Federal Reserve Board economist Claudia Sahm on Monday’s gas prices reaching the highest price per gallon of the year.
Why It Matters: The national average for regular gas reached $3.88 a gallon on Monday. According to AAA data, it is the highest price since October 2022 and is a 20 cent increase compared to this time last year.
Why Prices Are Higher: OPEC+, a group of major oil producing countries including Saudi Arabia and Russia, announced cuts in oil production earlier this year. And in early September, "Saudi Arabia and Russia agreed … to extend their voluntary oil production cuts through the end of this year," The Associated Press reports. This decreased supply, mixed with other geopolitical factors like lessening fears of a U.S. recession (amid slowing inflation) and the destructive floods in Libya (temporarily disrupting exports of oil from the nation), has caused increases in prices at the tank. However, Treasury Secretary Janet Yellen explained on Monday that she expects energy prices to "stabilize."
by Jenna Lee,