Sharply higher crude oil prices are benefiting at least one Michigan industry: oil and gas producers.
Tuesday, President Joe Biden announced that the U.S. will ban all Russian oil imports, toughening the toll on Russia's economy in retaliation for its invasion of Ukraine. But he also acknowledged it will bring costs to Americans, particularly at the gas pump.
The average price for gasoline in the U.S. is hitting a record $4.17 per gallon. According to the AAA, the average price rose by 10 cents per gallon in one day, and it's up 55 cents since last week.
The all-time high was $4.10 per gallon in the summer of 2008.
The increase in gas demand and a reduction in total supply is contributing to rising prices at the pump, but skyrocketing oil prices are playing an increasingly large role.
The price of benchmark U.S. crude jumped 8% Tuesday to more than $129 per barrel.
Jason Geer is the president and CEO of the Michigan Oil and Gas Association. According to Geer, Michigan ranks in the top 20 of oil producing states, employing more than 22,000 Michiganders.
Geer said higher crude prices are not a “bad thing” for the industry. But he adds the state’s industry leaders recognize higher prices “hurts consumers.”
“We see this as a short-term situation,” said Geer. “Some of the long-term effects will depend on federal policy on oil and gas.”
Geer said the Biden administration is considering new methane monitoring rules that may make low production wells less profitable.
