No, crude prices are not headed for $150 a barrel
en masse from conventional cars to EVs, a huge rise in the cost of gasoline and diesel would be even more powerful than these subsidies. Saudi Arabia and Russia are rational states, not particularly prone to bouts of suicidal anxiety. Why would they constrain production enough to accelerate the dumping of petrofuels for mobility? Four, the Ukraine war, a prime driver of food and fuel inflation, is a war of choice.
Russia has annexed parts of Ukraine to maintain land routes to its all-weather naval base in Crimea and will fight to retain this access. For the West, supporting Ukraine in opposing Russian occupation of their land is also a matter of choice. It is a convenient way of degrading and draining Russian military resources without putting any Western lives at risk.
If the political discomfort from sustained inflation outweighs this convenience, the West will likely choose to stop supporting Ukraine. The unrest among Polish farmers over Ukrainian grain being shipped by river and instead of the traditional route via the Black Sea, thus lowering the price of locally produced grain, has forced the Polish government to cool its enthusiasm for arming Ukraine. The electoral victory of a Russia-friendly party in Slovakia will add to the pressure within Europe to bring the war to an end.
The Germans are up in arms against their government’s move to switch residential heating to new-fangled, electricity-driven heat pumps, a proximate driver of which is the shortage of gas thanks to Russia. Policymakers and citizens alike would welcome an end to the war and resumption of easy access to Russian gas. Ukraine’s so-called summer offensive to recapture land from the Russians has more or less fizzled out.
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