Gas prices have hit $4.49 a gallon across the country, after months of rocketing costs and supply concerns linked to the COVID pandemic and the war in Ukraine.

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The US average price for regular-grade gasoline, released by the Energy Information Administration on May 16, has risen 16 cents in one week. Prices have surpassed the high of $4.11 set during the 2008 financial crisis—as they briefly did two months ago—although when adjusted for inflation, $4.11 equates to about $5.20 a gallon.

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Every state is averaging at least $4 per gallon, according to the EIA’s latest figures, with higher prices around the West Coast and lower prices in the Midwest and Gulf Coast. In California, which tends to have the country’s highest gas prices, the average on May 19 is $6.06 per gallon, said the American Automobile Association.

Now pandemic restrictions have been lifted and many Americans are returning to life almost as it was before the virus hit, is there any chance that prices will go down soon? How much will gas cost next month?

What Affects Gas Prices?

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To understand gas price fluctuations and forecasts, we need to look at the factors that have the biggest impact on prices.

Crude Oil Markets

Dean Foreman, chief economist at the American Petroleum Institute, told Newsweek that the main factor is the price of crude oil.

“About 60 percent of the price of gasoline at the pump is currently made up by crude oil. If you were looking at it on a year-to-year change basis,” he said, and what “makes up the difference in what we ‘re paying now versus what we paid a year ago, you find that, basically, 90 percent of the change in prices was made up by the change in the price of crude oil.”

Foreman added that crude oil prices were driven up or down by the fundamentals of supply and demand, inventories, seasonality, capacity, trade relationships and value after refining.

“It’s not just the current snapshot of these factors, it’s also the expectations of how they could change. So, financial markets and geopolitics also play a role and especially right now, with the events that have transpired with Russia’s war in Ukraine, and this has had a domino effect on global petroleum markets,” he said.

Supply and Demand

Richard Joswick, head of global oil analysis at S&P Global Commodities Insights, said a “race between demand growth and supply growth” was having a big impact on prices at the pumps.

“The supply of gasoline, diesel and jet had been limited, because there was refinery maintenance going on. There was also loss of some Russian supply. There was high prices for natural gas, which affected refinery profitability and economics, and limited refinery runs in Europe. So, there were a whole host of factors that had kept oil inventories low. And so we started out low, and now everybody’s trying to ramp up.”

Geopolitical Shocks Such As the War in Ukraine

Even though the US doesn’t import much crude from Russia, oil is traded on global markets so Moscow’s invasion of Ukraine is affecting prices all over the world.

The war has not hampered production of Russian oil—unlike Ukrainian grain. However, the sanctions imposed by the West, which limit the ability of Russian producers and refiners to access international banking systems, have led to a worldwide shortage of supply.

The world consumes roughly 100 million barrels of petroleum per day, Foreman said. Estimates for how much Russian oil has been taken off the market range from 1 million to 3 million barrels per day.

The American Fuel & Petrochemical Manufacturers association said Russian crude accounted for just 3 percent of total imports into the United States and 1 percent of what American facilities refine in a single day. “We can find replacements for the crude oil we had been getting from Russia,” said an AFPM spokesperson.

COVID and the Post-Lockdown Spike in Demand

Although it appears that the worst of the COVID pandemic might be behind us, gas prices are still being affected by lockdowns—and the release of pent-up demand when those restrictions ended.

Since the third quarter of 2020, global demand for petroleum has increased faster than production, according to an EIA spokesperson.

People were driving and traveling less at the height of the pandemic, which meant there was less demand for gas. As economies began reopening in 2021, consumption increased rapidly.

“When petroleum consumption outpaces production, it’s necessary to draw oil out of global inventories. We currently estimate that OECD oil inventories remain at their lowest levels since mid-2014,” the spokesperson said.

Refinery Disruptions and Capacity

“Refinery disruptions caused by the Texas cold snap in February 2021 and Hurricane Ida in August 2021 led to significant draws from US gasoline inventories,” said the EIA spokesperson.

“Since March 2021, US gasoline inventories have generally remained near or below the bottom of the previous five-year range.”

These low inventories drive up prices, as does a dip in the United States’ total refinery capacity. This has declined approximately 1 million barrels per day since 2020, resulting in a tight refining market.

Will Gas Prices Go Down in June?

Yes, the cost of gas may go down in June, but prices are set to remain volatile.

Joswick said supply had begun to ramp up to meet higher demand. “All indications are that supply is starting to edge out or will soon edge out in that race, which implies that prices should stabilize and eventually come down. Now, is that June? I can’t say if it’s June or July, but the The price for diesel is already starting to ease down.”

The EIA is predicting an average price of $4.15 per gallon in June, but the spokesperson warned that there was a lot of uncertainty in the forecast, even more than normal. “These forecasts could be significantly affected by further geopolitical developments, responses to the ongoing pandemic or other factors.”

What Has the Government Done So Far to Help?

In late March, President Joe Biden announced that 1 million barrels of oil would be released from the strategic petroleum reserve (SPR) every day for six months.

This move, described by the White House as “the largest release of oil reserves in history,” was followed by other countries that are members of the International Energy Agency releasing oil from their own reserves.

Joswick said: “That has really put a cap on how high crude oil prices were rising or can rise. When the war first broke out, the prices of crude oil spiked—they reached over $130 a barrel. And with the crude oil now available from the SPR [and] from the European strategic reserves, crude oil prices are down around $110 a barrel. So, that’s a 20 percent decline.”

Without those SPR barrels, he added, the global markets would be much tighter and prices would be higher.

However, the Biden administration was criticized by Republicans last week for a decision to cancel oil lease sales in Alaska. Some GOP lawmakers said the lease sales could alleviate high gas prices, but the Department of the Interior told CBS News that the decision was down to “a lack of industry interest in leasing in the area.”

What Needs to Happen for Gas Prices to Fall?

Several geopolitical developments could have a big impact on gas prices, but some of them seem highly unlikely, Joswick said.

If the US manages to agree an Iran nuclear deal, sanctions would likely be lifted on Tehran and Iranian oil exports would increase. This would push down oil prices worldwide, he added, but a deal is not expected any time soon.

Joswick also pointed to “two unpredictable things” that could make a difference at the pumps. “One is what kind of sanctions are imposed on Russia for the war in Ukraine, and the other one is the timeline of those sanctions. There’s a lot of negotiations going on right now in the European Union, and some of the countries are disagreeing about timing and what’s included and what’s not included.

“And that’s why when I say it’s a race between demand growth and supply growth, supply growth has the edge right now. It’s likely to catch up.”