INDIANAPOLIS — With the price of oil dropping, experts predict the price of gas will continue dropping too. But, the price decrease depends on many factors, specifically related to the ongoing war in Ukraine.
“If there’s going to be peace over there, that could resolve the problem,” said Farzad Taheripour, professor in the Department of Agricultural Economics at Purdue University. “That could reduce to price of crude oil over time. But if things get worse, we will expect a higher price of crude oil again and then a higher price in gasoline.”
Experts we spoke with say there’s no way to know for certain when the prices will drop significantly.
“It’s very hard to make forecasts,” said Nikos Zirogiannis, assistant professor of Environmental Economics & Policy at the Paul O’Neill School of Public & Environmental Affairs. “It will depend on how long the war lasts, how many other countries will impose further sanctions on Russian exports, how quickly and how likely are other suppliers to increase their production.”
Analysts said sanctions on Russian oil could lead to countries depending on their own supply, but that takes time.
“So in the US for example now, oil drillers have an incentive to start ramping up their production to off-set that decrease in oil supply,” Zirogiannis explained. “And, that ramping up is not easy to do.”
Experts do encourage people to find alternate modes of transportation as the prices remain high.
“Consumers can reduce a little bit their consumption,” Taheripour said. “So if there is no need to travel quickly around, that could help to reduce the impacts of the shock.”
GasBuddy released a statement this week which quoted Patrick De Haan, head of petroleum analysis. He said, “While the decrease could be short-lived, it is nonetheless a well-needed break from the large surge in gas prices we’ve experienced over the last few weeks. The situation remains fluid, and escalations remain very possible, if not likely. For now, a $4.50 per gallon national average is off the table, but it certainly could be a future possibility as long as there is conflict between Russia and Ukraine.”