As reported in the news, for example the Guardian, US current inflation rate is above 8% in annual rate, close to a 40-year high. Can someone please help me understand the root cause?

I started hearing people around me blaming Biden for this, and saying Trump could do better than this. However, since many countries are also experiencing high inflation rate, I'm not super convinced that US high inflation is because of that.


7 Answers 7


No, the inflation that the country seeing is not the fault of Biden. There are a lot of factors that are at play which and causing inflation issues. These range from polices that got put in place after the last recession in 2008 to ones put in place because of covid. It could be said that we are seeing this happen now because we didn't take action that could have caused it before Biden took office. This is something that can't be blamed on any one person though I would say that taking actions to delay it (and thus not take blame) does pin some blame on you.


Cotton makes this case in the course of explaining his forthcoming vote against Powell’s renomination. And obviously, Cotton is not trying to blame Trump (whose name does not appear in his column). But, while anything Powell does in his second term will be on Biden, the reason Powell has the job in the first place is that Donald Trump appointed him.

Trump selected Powell in large part because he deemed his predecessor, Janet Yellen, too short to effectively handle monetary policy. Once in office, Powell was an inflation dove, leaving interest rates low in order to run the economy hot. Trump was constantly demanding Powell push interest rates even lower.

Mr. Powell also maintained the Fed’s radical emergency monetary policies a decade after the end of the 2007–08 financial crisis. The Fed had thereby already exhausted the normal tools of monetary policy when the pandemic hit and was forced to use unprecedented levels of government intervention to prop up the U.S. economy. As a result, the Fed’s balance sheet is nearly $9 trillion and continues to grow by more than $100 billion a month. For perspective, the Fed’s balance sheet barely surpassed $2 trillion after the financial crisis.


Facts First: While some economists say the stimulus packages passed in response to the Covid-19 pandemic are having an impact on inflation, it’s misleading to suggest that’s the only explanation for the recent rise in inflation. Blaming it exclusively on Democratic spending proposals misrepresents what’s actually been passed, and ignores the trillions of dollars in spending passed last year supported by Republicans and signed by then-President Donald Trump which economists say have also contributed to inflation.

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    – Philipp
    Jun 28, 2022 at 9:55

This current level of inflation can be traced back through decades of monetary policy - however this story really begins with the "too big too fail" bail out in '08. This introduced quantitative easing(QE) as a norm, which basically will continually increase the money supply, which in stupid-simple economic terms creates inflation linearly.

Obviously there's more to the world than that, and an increase in money supply can naturally flow with growth of GDP, growth of population, etc without causing inflation. However QE isn't even the attempt to find the perfect balance to increase money supply in that most effective, optimal way. It's acting on the fear of economic downturn to increase money supply to buy securities, which is basically just adding cash to banks balance sheets to lend out. This creates a boost in the economy meant to be temporary so it kind of "cancels" the anticipated dip. The problem is "Quantitative easing may cause higher inflation than desired if the amount of easing required is overestimated and too much money is created by the purchase of liquid assets"

So we heard about the bailout in '08, 800 billion! The largest such package in history! But quantitative easing kept happening. "The Federal Reserve began conducting its fourth quantitative easing operation since the 2008 financial crisis; on 15 March 2020, it announced approximately $700 billion in new quantitative easing via asset purchases to support US liquidity in response to the COVID-19 pandemic."(also from Wikipedia article linked above)

This was March of 2020, and that's the 4th round of quantitative easing. You heard about PPP right? Main Street lending program? COVID Stimulus checks? the list goes on. This all happened after that fourth round at 700 billion, which left our M2 money supply at $16,066.4 billion (or roughly 16 trillion). Between March and June (3 months) we increased the M2 supply by more than 2T again. That's as much as the questionably excessive quantitative easing happening over 12 years. It doesn't stop there.

Fast forward 2 years to June 2022 (we only have May's release data which covers April... but) we now have over 21 trillion in the M2 supply. That's another 5 trillion. $5,000,000,000,000. In terms of QE, we over estimated the influx of capital needed to avoid a downturn which can only lead to inflation (which ironically, leads to a downturn). More simply, there is high inflation now because we printed more money than is realistically justifiable by the increase in our population and production.

To clarify, quantitative easing and an increase in the M2 supply are not the same thing. They're somewhat intermingled in making the above points. This is because while not the same thing, every time the fed enacts some form of quantitative easing (or a stimulus check is basically quantitative easing but straight to consumers vs purchasing bank debt, or even subsidizing covid vaccines is basically QE for those businesses), the fed prints the additional funds to cover the cost of these programs. QE is the largest example, but most of the new money printing since 2020 hasn't been termed QE, but is effectively the same in principle. If you aren't familiar with some of these terms and concepts, I'd also recommend reading about the Fed's balance sheet, which has huge implications in inflation and is directly related to what is discussed above. (will add more on that another time if possible)

Now for the opinionated bit: This isn't Biden's fault, or Trump's fault, or Obama's fault. It's been taking the easy way out on monetary policy for well over a decade, and it's finally catching up to us. There are plenty of other things to blame it on, and legitimately (i.e. war in Ukraine), but it boils down to lax monetary policy (aka just print money) which cynically is probably driven by greed in some cases, sure. But it's also policy set by real people trying to "keep the world running smoothly" which to be fair, isn't a job I want...

I think it's worth noting that other answers aim to place the blame on the previous administration for delaying it - I don't buy this for a second. The increase in money supply hasn't slowed or changed course in any meaningful way regardless of the change of administration. I'm not stating Biden's done worse than any prior president, but also not necessarily better; I don't think I have the knowledge to make that assertion with any confidence. From the data we can see, what we can now clearly see as over-creating new USD* has been consistent and in the background regardless of the current political affiliation of those in office for quite some time.

For more information on money supply (data only, no opinions) check out the fed's repository <- this is citation for earlier data points as well.

P.S. After reading another answer I wanted to add another clarification, there are many, many outside pressures and causes of inflation. I write about the money supply as the cause because its where it can be shown the most clearly with data. The root cause is deciding that the solution to the problem at hand is printing more money. Not that it can't be a solution in some cases, but that it has been done recklessly and far too often in the last ~14 years or so. The cause is determining we can fix our economic problems by throwing money at them, throwing too much, and now we have to climb out of it(via dealing with inflation).

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    The previous admin refused to take certain actions that were recommended because they didn't want to raise the interest rate which would have had a massive impact on the loans they held. It shouldn't be that hard to draw a link to the hundred of millions that Trump and his companies hold in loans to a lack of willingness to raise interest rates.
    – Joe W
    Jun 15, 2022 at 21:14
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    Yes, and you're saying that's the entire cause, or..? I don't see how that's in contrast to my answer / can help improve it.
    – TCooper
    Jun 15, 2022 at 21:17
  • 2
    it's gotten a lot worse due to the lockdown related spending in the last few years though tradingeconomics.com/united-states/money-supply-m2 Jun 16, 2022 at 5:21
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    The problem is that this inflation was happening regardless of what Biden did with monetary policy. You also say that a 5T increase happened in this administration but we can't say how much of that was a direct result of this administration or as a result of things that they inherited when they took office. I will still go back to my previous statement that people have done everything they could to delay it so they could blame it on the next guy. It is very frustrating to see all the blame on Biden and that Trump could have been better when we can easily point to flaws with that statement.
    – Joe W
    Jun 16, 2022 at 13:57
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    "5 trillion of the increase (read failed monetary policy) has occurred in this administration" Maybe I'm misreading the table in your source but it looks like M2 was 19.4 trillion in Jan 2021 when the current administration started and 21.7 trillion in the most recent month, so an increase of 2.3 trillion, not 5 trillion? I think the other half of that 5 trillion increase was under the previous administration.
    – Marc
    Jun 16, 2022 at 21:41

There's several causes of the current inflation problem

COVID-19 shut the world down for a short time

March and April of 2020 were remarkable in that most of the world shut down. Very little was made, shipped or unloaded. And countries took various tracks to reopen after that shutdown. Covid didn't stop either, it just meant nobody could afford to maintain stricter shutdown.

What happened next was a series of "supply bubbles" that have (and still are) transiting through the various economies of the world as shortages impact various parts at strange times. As such, prices tend to rise in a temporary fashion. This is what experts call transitory inflation. From the first link, they talk about the price of lumber

At its height this spring, lumber was up over 300%. Some in the industry even started wondering if the pandemic-spurred housing and DIY booms would keep wood prices permanently elevated. Of course, we now know the verdict is no: Since peaking in May, lumber prices are down 69%.

Transportation woes

For instance, the Port of Los Angeles has a decent backlog of ships

The number of container ships queuing to enter the ports of Los Angeles and Long Beach declined to 78 vessels on Tuesday, down from the peak of 109 ships reached a month earlier, according to the Marine Exchange of Southern California.

That's just container ships. There was a long-building truck driver shortage as well. Fewer trucks means that goods don't get delivered to shelves for purchase, which means shortages and price increases.

The War in Ukraine

This has exacerbated shortages at a time when supplies were already low. In particular there is an embargo on most Russian products (like oil) and Ukraine itself is having difficulty exporting things it normally sells abroad (like wheat).

US Politics

This is the Biden part. The American Rescue Plan Act bill spent a lot of money on the US economy, including

  • Distribute $1,400 per person in relief payments
  • Extend unemployment benefits to September 6, 2021
  • Increase Supplemental Nutrition Assistance Program (SNAP) benefits by 15 percent through September 2021
  • Increase the Child Tax Credit from $2,000 to $3,000 per child over age 6 and $3,600 per child under age 6
  • Increase the Earned Income Tax Credit
  • Expand childcare assistance and provide an additional tax credit for childcare costs

Now, to be fair, this was stimulus round #3, and rounds #1 and #2 were bipartisan and distributed under Donald Trump (both were passed in 2020, when the country was still affected by Covid). What differentiates this is that it was passed in March of 2021 with only Democratic votes. When you look at the GDP graph, you can clearly tell when the shutdown occurred. The dot on the graph is March 2021, when the act was passed. You'll note the economy in March 2021 was larger than it was in Feb 2020 (just before the pandemic).

GDP, month-by-month

Still, Democrats insisted the spending was necessary to save the economy

And we’ve heard a lot about how the American Rescue Plan will prime the American economy to come roaring back. Economists are already projecting that economic growth could double as a result of the American Rescue Plan. When over 85% of American households get some checks and the money goes out, it starts revitalizing our economy: people shop in the stores, eat at the restaurants, even begin to travel, see their relatives maybe for the first time, if people are vaccinated. Wow, this is great news. This is great news. So I think America is turning the corner and I think the attitude of Americans is turning the corner as well. People now see a brighter future for this country and their regions.

In practice, what this did was to give everyone the $1400 per person plus up to $300/mo per child for 6 months and an additional tax credit on top of that. The goal was to create a new Federal subsidy

There are no more advance monthly payments, 17-year-olds no longer qualify for the credit and parents or guardians will now need to file a tax return to receive the credit next tax season. It will also be worth significantly less — up to $2,000, compared to up to $3,000 to $3,600 in 2021 — and is no longer fully refundable.

Fully refundable means that if you paid no taxes, the government would give you that amount as a "refund".

Biden and Democrats also want to pass the "Build Back Better" plan in addition to this, which costs around $2T. Bernie Sanders (who ran against Biden in 2020) wanted $6T, with the actual consensus plan being as high as $3.5T.

Biden has also paused US student loan repayments, which is not helping things

The administration’s decision to extend the student loan moratorium through Aug. 31 will keep money in the hands of millions of consumers who can spend it, helping to sustain demand. While the effect on growth and inflation will most likely be very small — Goldman Sachs estimates that it probably adds about $5 billion per month to the economy — some researchers say it sends the wrong message and comes at a bad time. The economy is booming, jobs are plentiful and conditions seem ideal for transitioning borrowers back into repayment.

This all plays into the perception that Democrats are at fault for inflation (this is an opinion article)

A major inflation driver was last year’s $1.9 trillion American Rescue Plan. At the time, the Congressional Budget Office estimated that the baseline economy would operate $420 billion below capacity in 2021 and then gradually close that output gap by 2025. While some stimulus was justified, lawmakers shot a $1.9 trillion bazooka at a $420 billion output gap. And this was just weeks after the December 2020 stimulus law poured in $900 billion. Economists on the left and right, such as Lawrence Summers, warned this excessive stimulus would bring inflation. They were right.


No world leader can stop inflation at present, due to the rolling transitory inflation spikes still rippling through the economy. Where people are blaming Biden is that he, and his party, have spent large sums of money (which are now circulating in the economy) and wish to spend even more. Biden is being perceived as not taking the problem seriously enough.

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    I'd also note that China is still trying to do Zero COVID for some reason, which doesn't exactly help the world economy. Luckily all other nations have abandoned this folly by now. Jun 15, 2022 at 22:49
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    Thank you for providing an answer that covers all of the major reasons rather than cherry-picking one or two. One important point that I would also recommend adding, though, is that those last unemployment benefit extensions happened during a labor shortage. Extending unemployment benefits at the height of the Covid shutdowns when unemployment was looking like Great Depression levels was one thing. Continuing that after we were already months into a labor shortage was quite another, especially with the supplement being a fixed amount rather than based on prior income.
    – reirab
    Jun 18, 2022 at 5:44

Single answers for why 2022 has seen a lot of inflation are reductionist and broadly wrong.

  • Pandemic related changes in spending

When the pandemic began, consumers tightened their budgets in response to market uncertainty. As the pandemic wore on, consumers spent more on pandemic-safe purchases (broadly: delivered products in lieu of services). As the pandemic wanes, consumers return to their old habits.

  • Pandemic related supply chain bottlenecks

Changes in spending precipitate commensurate changes in supply chains. Ramping down production and delivery did not cause widespread, prolonged deflation for a variety of reasons ("just-in-time" manufacturing, the ease of lay offs, etc...). Conversely, ramping up production requires hiring workers who often need training and may be scared of COVID. These factors substantially increased the cost of labor. This wage growth, in turn, caused an increase in demand.

  • Pandemic related increases in government spending

COVID related stimulus packages were signed into law by both Trump and Biden administrations. Future economists will surely debate the societal value of these measures for years, but people without money tend to work, and people working near other people spread respiratory diseases. COVID pushed the US' medical system over the brink in some places.

  • War-related commodity shortages - oil/gas and agricultural products

Russia's invasion of Ukraine was met with sanctions and while Russian oil and gas (Russia was the world's largest exporter of oil and gas) continues to flow, the rate diminishes. A diminished energy supply causes increased prices for energy which increases the cost of transportation, heating, cooling and the manufacture and delivery of other goods. In addition, both Russia and Ukraine are top agricultural producers whose exports have been greatly diminished by the conflict.

  • Bottom Line

Biden and Trump agree on very little beyond vaccinations and that COVID-related stimulus packages are good while they are/were in office. The Federal Reserve controls interest rates. Putin controls the war (insofar as he could unilaterally cease-fire and retreat at any time), and evolution controls the virus. These are just 4 of the factors causing the current inflationary period.

  • 2
    Your first sentence was the entire goal of my answer, but I never stated it clearly. I focus on the increases in M2 supply as that's a consistent and real concrete factor, but those increases are caused by a variety factors. The problem is, there are many other pressures I failed to mention / didn't even give a head nod too. Glad you added another answer :)
    – TCooper
    Jun 15, 2022 at 22:23
  • @TCooper I wanted to add a section on recent historical monetary policy, but it's just so complicated and I felt that 4 of the many reasons was as good as 5. Even if I suspect that it might be a bigger factor in many ways.
    – user121330
    Jun 15, 2022 at 22:40
  • I would always say it's government response that caused inflation. e.g. it wasn't the SARS-COV2 virus which sent out stimulus checks. Simultaneously distrupting the economy with lockdowns, and giving away unprecedented amounts of freshly printed money. That's what causes inflation. Jun 16, 2022 at 5:13
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    @roo2 You're free to disagree. You might want to at least address the labor shortages, supply chain issues and that pesky war in Ukraine and how they [don't] impact inflation. A fundamental fact of monetary politics is that my pain at another time is always preferable to my pain now, so your viewpoint is, at least, easy to understand.
    – user121330
    Jun 16, 2022 at 16:15
  • @user121330 hmm you are right that not everything is under government control e.g if everyone did get sick with COVID, production would drop. I make the point that government is responsible for the proximate causes of inlation (creating money and giving it to people so that they won't have to work) same for ukrain, the war is out of our control, but the decision to ban russian imports of oil and fertilizer is the proximate cause of those things becoming more expensive Jun 16, 2022 at 22:51

Josh Marshall from Talking Points Memo wrote an editorial yesterday on energy prices, Saudi Arabia, and Biden/Trump. This doesn't completely answer the question of inflation, but it does provide a piece of the answer, and it's interesting in that the article contrasts the difference between Biden and Trump here.

There’s a complex set of causes behind the inflation that currently plagues the U.S. and global economy. The exact interplay between supply chain disruption, pent-up demand from the pandemic, demand driven by stimulus spending, changed work and leisure patterns driven by the pandemic isn’t clear. The relative importance of each is a matter of on-going controversy. But a critical part of the equation is energy prices — both in their political impact and as a driver in the economy overall.

For many decades, Saudi Arabia has been the key player in the global oil market. That is not only as one of the largest producers but as the producer with the greatest production elasticity. Put simply, the Saudis can dial up supply quickly if they want to. And that means they have an outsized impact on global prices. For the last year and a half the U.S. has needed the Saudis to step in and hike production very, very badly. That’s both for the health of the U.S. economy and for Joe Biden’s political fortunes. And MBS has consistently said, no. Why should I? What have you done for me lately? All I hear is that I’m a pariah and now you want my help? Being tight with the Trump family and particularly Jared Kushner hasn’t hurt certainly. There are numerous reasons why MBS is more aligned with U.S. Republicans and more autocratic rulers around the world. But the biggest thing here is likely simply to be respected and power.

The Saudis didn’t cause the economic trajectory of the last 18 months. But they could have altered it very substantially. They didn’t. And they refused against a gusher of U.S. demands and pleas.

and quote from the beginning of the article

You may have noticed that Joe Biden is traveling to Saudi Arabia next month and that he plans to hold a summit with the de facto ruler of the country, Mohammed bin Salman — usually called MBS. He’s going to Riyadh. MBS is not coming to Washington. This is presented as a full reset of relations between the two countries and — though this is stated less directly — a full reset with MBS. So all that human-rights, Yemen-war, Jamal-Khashoggi-being-dismembered-at-a-consulate-in-Istanbul stuff is done with. That was then. This is now.


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    I'd note that the entire conflict with Saudi Arabia was started over the murder of a single person who wasn't even a US citizen (just a permanent resident). For the Saudis this is an incomprehensible style of doing business, so they want Biden to bend the knee before making any concessions. Jun 15, 2022 at 19:19
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    @JonathanReez It seems easy to forget the conflict in Yemen was killing hundreds daily. Jamal Khashoggi was as much a relatable symbol of MBS' rule as he was a US resident journalist.
    – user121330
    Jun 15, 2022 at 20:07
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    I would take underhanded action by the Saudi's as a given. Under Trump there was a policy of energy independence. The US became a net exporter of oil, an increase in the global oil price would have made the US even richer! What's changed is that Biden's discouraged (sometimes banned) new drilling and generally discouraged investment. Despite SA's characteristically self serving actions, this is a US issue caused by US policy. Jun 16, 2022 at 5:19
  • @roo2 why are people talking about the USA having several thousand unused drilling permits? Jun 17, 2022 at 9:56

The cause of inflation

Inflation happens when dollars are added to the economy faster than the supply of goods increases. Infographic, money supply vs inflation

Limits of Government influence

As other answers have noted, we can't really know to what part of inflation was caused by government policy and what part was caused by external factors.

Government can increase money supply through deficit spending "printing money". It can also influence the amount of goods available through industrial, trade, and tax policies. I'm ignoring the Federal Reserve and commercial money creation and focusing on "The Biden Administration" meaning the Whitehouse and Democrat controlled congress.

Supply of the currency

The Government increases the money supply by engaging in deficit spending. As you can see from this chart, the overall supply of dollars has been steadily increasing, but growth spiked dramatically from mid 2020.

This was driven by a 2.2T spending program, the largest in US history to fund COVID response (lockdowns). Note, despite being signed in by Trump, the program was bipartisan, and the Democrat controlled house had proposed an even larger $2.5T spending program.

In the Biden era, congress enacted a further $1.9T in additional COVID stimulus. The total budget deficit for 2021 was $3.7T with an additional $1.8T expected for 2022.

Would a republican controlled government have engaged in less deficit spending? Controlling government spending is one of their main platforms.

Supply of goods

At the same time that new money has come into the economy, the production and supply of goods has been reduced. Extended COVID lockdowns have prevented people from working. various policies have exacerbated supply chain disruptions. Taxes, and new regulations have been added imposing new burdens on production.

A ban on oil drilling in federal land, cancelling the keystone pipeline, new taxes, and a ban on importing Russian oil have all contributed to oil and gas becoming more expensive in the US.

The market and confidence

If you hold a currency, but see that it is becoming worth less and less, you may be inclined to sell it before it looses more value. When many people notice this trend, they will also try to sell, becoming increasingly desperate as they see that others are panic selling. This is one cause of "runaway inflation".

If Government steps in, takes strong measures to re-assure the market and secure the value of its currency. A panic may be averted.

The Biden government has made some movements in this direction, dialed back some of their future deficit spending plans and taken other action. But some of Biden's words and gestures seem like they will be unconvincing.


So Biden policy has increased the money supply with deficit spending, and decreased the supply of goods through increased taxes, pandemic measures, regulation and sanctions. These policies contribute to inflation.

We don't know how much inflation can be blamed on policy versus external factors, or exactly how a Republican administration would have behaved differently, but they speak of reducing government spending and barriers to oil production, both of which would reduce inflation.

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    politifact.com/factchecks/2019/jul/29/tweets/… shows that Republican administrations between Reagan and Obama had higher deficit spending than Democratic administrations over the same period. Republican words are not matched by reality.
    – prosfilaes
    Jun 16, 2022 at 18:45
  • interesting point, I think it is misleading to look at control of the whitehouse alone as budgets are created by the congress which is not always controlled by the same party. If you break it down per branch of government, it looks very different. Especially when republicans have had control of all branches. extranewsfeed.com/…. Jun 16, 2022 at 23:02
  • good point in general though about words of politicians not matching their actions. I think people sometimes imagine republicans to be a small government party. But they have been more than willing to do what is easy and popular (tax cuts) but not what is necessary (reduce government spending, inefficiency and grift) Jun 16, 2022 at 23:23
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    @prosfilaes Furthermore, Obama increased the deficit further still over the next couple of FYs, reaching a high of around $1.4 trillion even while the repayment of the hundreds of billions in TARP loans was reducing the deficit. When the deficit finally started decreasing - off of its dramatic record highs - during the Obama administration was after the GOP regained control of the House. Sure, Republicans (especially during Trump's term) often have more talk than game on reducing deficits, but to pretend Democrats aren't much worse about it is just wrong.
    – reirab
    Jun 18, 2022 at 5:56
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    @prosfilaes The situation improved later on during Obama's tenure... largely because Democrats lost control of the House 2 years into his first term and the Senate later on. I don't excuse Trump's deficit spending - I give him and his followers plenty of blame for that - but it was made much worse by Democrats taking control of Congress 2 years into his term and yet worse once Biden took office. Especially when considering both the President and the Congress (who must work together to pass spending,) it is unambiguous that Democrats have been much worse on deficits, except Clinton.
    – reirab
    Jun 20, 2022 at 4:16

With oil used to transport everything and also used for producing plastic which again is used in a lot of products, oil prices affect practically everything. Reddit user /u/Dubb18 had a very interesting post about oil prices being so high which I copied below with very minor edits.

The Dallas Federal Reserve took a survey of 132 small and large energy companies to see what is keeping them from growing production more than what they had already planned. See the following chart:


59% said it was due to investor demands. Long story short, investors want to see a nice return on their investment. Yes, they rake in the cash when oil prices are high. To be "fair", they also take significant losses when oil drops below a certain point.

15% said they couldn't grow production more due to the lack of skilled labor and overall supply chain issues.

11% said social, governance, and environmental issues.

8% said lack of financing

6% said government regulation

There are other interesting facts gathered by the Dallas Federal Reserve if you want to take the time to educate yourself about other topics concerning the oil/gas sector during this global energy crisis.

https://www.dallasfed.org/research/surveys/des/2022/2201.aspx#tab-questions ​ The US as a whole is producing about 11.7 million barrels per day, and is headed towards 12 million by the end of the year. Again to be "fair" to energy producers, it takes time turn a lease into a producing well. It can take years. Things fell off of a cliff during the pandemic. Having said that, many are in no hurry to drastically ramp up production. One CEO said he is relying on market correction to fix prices. That translates to global consumers decreasing their gas consumption significantly. If the global economy doesn't completely collapse, the US should be producing near pre-pandemic highs. Note that this doesn't take into account that there were some energy producers that ceased to exist during the early stages of the pandemic. Biden's push to find cleaner energy does play into how investors look at the sector over the long term. The global stance on wanting cleaner renewable fuel sources also does that. Refer to the following US production chart for full data:


Refineries were also impacted by the pandemic as some closed permanently. Since there is a move to cleaner energy, maintaining, restarting, and building new refineries is not attractive in the long term towards investors. It's expensive to do so. They're seeing a nice profit during this period too. Refer to the following articles for details:



Bottom line: In the short term we are seeing a major unsustainable global supply issue. In the broader term, we are seeing an exponentially increasing demand issue that needs to be addressed because that is also not a sustainable path.

  • In the bottom line you say that oil production cannot keep up after the pandemics with demand for oil, but in the first part this answer seems rather to suggest, that there is some sort of monopoly rent involved in the oil market with producers outright refusing to produce more oil? So, do oil producers not want to or cannot produce more oil? Maybe a mixture of both. Jun 17, 2022 at 7:05
  • "> 59% said it was due to investor demands." Investor fear of current regulations and future regulations imposed by a government seen as being hostile to fossil fuels could be a big part of this. Jun 21, 2022 at 5:39

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