Gas prices expected to increase after OPEC slashes oil production by 2M barrels a day

CHICAGO - The average gas price in Illinois is $4.32, while Chicago drivers are paying roughly $4.87.

Tight supply and increased demand are the main culprits for the recent increases in price.

And brace yourself — because the price hikes may just be getting started.

OPEC Nations agreed Wednesday to slash oil production.

OPEC members and their allies, including Russia, gathered in Austria to look at production levels.

Just the potential for a cut in supply pushed oil prices up by $3 a barrel on Tuesday.

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Then, on Wednesday, the group cut output by two million barrels a day — the deepest cut since 2020.

"I think this is really bad news for American consumers. But the truth of the matter is that dependency on foreign countries for American oil and gas is a choice. And it's a choice this administration has made repeatedly unfortunately with the policies they have pursued so far," said Mike Sommers, from the American Petroleum Institute.

If a cut results in sustained higher global gas prices, it would be a major win for Russia despite sanctions in place because of the war in Ukraine.

Moscow would make more money per barrel before a European Union ban on most Russian oil imports goes into effect, and make it much more costly for western countries to impose more sanctions on Russia.

"We absolutely do agree that we need to be less dependent on OPEC and foreign producers," said John Kirby, the National Security Council spokesperson.

In a statement, the White House describes President Joe Biden as disappointed in OPEC's decision.

Administration officials said they would consult with congress over ways to reduce OPEC's grip on energy prices.