With the unexpected production cuts announced by some of the top exporters in the globe, oil prices have risen.
After increasing by more than 5%, the price of Brent crude oil is now trading above $84 a barrel.
Experts cautioned that escalating oil costs might make lowering living expenses more difficult.
The RAC motoring club, however, stated that it does not anticipate a jump in gasoline prices until the higher oil price is maintained for a number of days.
After Saudi Arabia, Iraq, and numerous Gulf states announced on Sunday that they were reducing output by more than one million barrels of oil per day, Brent crude prices increased.
Moreover, Russia announced that it would continue to reduce 500,000 barrels per day through the end of the year.
The share prices of energy behemoths BP and Shell increased on Monday, jumping by more than 4% each.
Oil prices have since returned to the pre-conflict levels after surging when Russia invaded Ukraine.
To cut energy prices, the US has however been urging producers to raise supply. We don’t think cuts are advisable at this time given market volatility, and we’ve made that plain, a US National Security Council spokesperson said.
Rising energy and fuel costs have contributed to an increase in inflation, or the rate at which prices rise, placing strain on the budgets of many households.
The rise in oil prices, according to KPMG’s chief economist Yael Selfin, could make it more difficult to reduce inflation.
The increase in household energy costs won’t always result from rising oil prices, she added.
She explained, “The energy price cap, from which people will benefit, has already been established using earlier market predictions. Moreover, residential energy use is typically more gas-based than oil-based.
There have also been concerns that rising gasoline prices may have an effect on transportation expenses.
The RAC stated that it does not anticipate this to occur anytime soon.