Published on 6 May 2022 on Zacks via Yahoo Finance
One thing the Russia-Ukraine war has achieved is a significant reduction in the availability of oil and other commodities, with a resultant increase in their prices. The impact of this on the oil market has been so severe and the price impact so substantial that we’ve practically forgotten that the market was not in such a great place to begin with.
There were shortages in the market when all this started, because of low inventories of both oil and alternative energy, particularly in Europe. Personal consumption was hard to meet and on top of that, industrial and travel demand was picking up (and continues to recover today) with COVID fears receding. This is why Europe was in no position to say no to Russian oil, despite the moral impetus to do so.
While Biden has taken steps to fill the gap caused by the Russian oil embargo, there are physical constraints to doing this, which have to do with equipment and labor shortages and overall cost inflation. So supply remains constrained and oil prices extremely high.