US gas prices have surged to record highs of $5 a gallon, hitting American drivers hard and creating a political nightmare for the president.
The run-up in fuel costs is a result of the jump in crude oil prices.
That is part of the story.
When compared with the price of crude, gas prices are more expensive.
It's because of the "unprecedented" bottlenecks at oil refineries where crude oil is converted into usable products.
The plants are not able to cope with the rebound in demand for gasoline, diesel and jet fuel because of the impact of the coronaviruses. Their prices have gone up.
Analysts say that it will be difficult for the refinery to ramp up production quickly.
The industry has been damaged by coronaviruses.
The aftermath of the Pandemic is at the center of the current crisis. The world economy was affected by carbon dioxide.
3 million barrels a day of refinery capacity will be shut down in the next two years, according to analysts at Wood Mackenzie.
It can be hard to restart a refinery after it's closed.
There are a lot of operational issues that come back to haunt you a few months later. It's very difficult to run a refinery.
The price of natural gas in Europe went up as the economies rebounded. Many plants reduced their output to deplete inventories.
Beijing has restricted the export of refined products because of its pledge to slash greenhouse-gas emissions. Flows to Europe are unlikely to ever bounce back after the move.
Russia's exports of refined products have fallen as a result of Western sanctions.
It will be difficult for the refinery to ramp up production.
The refinery industry is taking off because of the huge increase in the price of gasoline and other refined products.
Analysts don't think there will be another price rise like the one already seen. Drivers shouldn't expect a big fall in the near future.
Mark Williams told Insider that the market will be tight for the next two years. The high price environment will continue through the middle of next year.
It can take a long time to build a refinery. Even though profit margins are high, investors don't want to invest in industries that are bad for the environment.
It's difficult to predict how much supply will increase in the future because of the complexity of refining.
There is still demand for oil.
Demand for oil is another part of the equation. It jumped towards the end of the year.
Will sky-high gas prices cause drivers to stop driving?
There hasn't been a lot of demand destruction so far, according to analysts at Wood Mackenzie. The peak summer driving season in the US is just starting.
There are a lot of other issues. Russian oil and refined products will be banned by the EU.
Analysts are not sure how much oil China will need this year due to its zero-carbon policy. If the economy is reopened, crude oil prices could go up again. There is only uncertainty.
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