It took a month for oil to go from $60-something a barrel to $100. Hugh Daigle, a professor of petroleum engineering at the University of Texas at Austin, said believe it or not, that’s actually the market showing restraint. “Now that we see that this may be a prolonged conflict, I would bet that it’s more likely that the prices will climb faster than they have over the past month,” he said.
Markets are finally pricing in the war, and will do so even if it were to end tomorrow. “It would take months for the price to come back to kind of that February baseline, if it ever does,” Daigle said.
There’s a saying in the oil industry that prices go up like a rocket and come down like a feather. That’s especially true in this case, Daigle said, because of damage to oil and gas infrastructure around the Persian Gulf. “That’s the sort of thing that’s gonna make these high prices persist for a long time,” he said.
For consumers, $100 a barrel is also a turning point because it translates to moving from $3-something to $4-something for a gallon of gas. “You know, in the United States, the great Satan is high gas prices,” said Tom Kloza, chief energy advisor at Gulf Oil.
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