Oil

U.S. gas prices soared in June of this year to an all-time high of $4.99 per gallon –– a 47% increase from prices at the start of 2022. In response to this raging inflation, President Biden traveled to Saudi Arabia in July, with part of the agenda set to discuss boosting oil production with Saudi OPEC leaders. His proposal was rejected and OPEC retained plans to cut oil production, which will drive up global energy prices further. These cuts have yet to be implemented. At the G20 summit in Egypt this November, world leaders acknowledged Western sanctions against Russia and resultantly high inflation rates that have driven up energy prices worldwide. Despite the energy crisis, G20 leaders reaffirmed their commitments to the Paris Agreement and worldwide efforts toward a clean energy transition.

In recent weeks, the war in Ukraine has seen major successes and failures on both sides. Advances have been made for the Ukrainian troops but Russia has found more pressure points to push, creating more economic unrest for the West. This conflict, only expected to last a few weeks, has turned into more than six months of intense battles and humanitarian disasters. Although physically it only affects portions of Ukraine’s population, its indirect consequences have extended much farther than eastern Europe. Russia has positioned itself directly against the entirety of the EU and the UN. These western powers have been heavily involved from the start, several rounds of sanctions have already been put into effect. However, their dogmatic approach to dealing with Russia is about to be tested in the coming winter. The U.S. has given lots of support in this conflict in the form of military aid and money, almost three billion dollars since the beginning of the Biden administration, but the consequences have been felt in the economy. A potential indicator for U.S. markets in the coming season may be Russia’s efforts to limit its oil and gas exports and increase energy costs for Ukraine. These next few months will prove to be critical in the outcome of the war and Russia’s future as a European nation.

The United States is at a crossroads in its relationship with Mexico. Congress is set to decide on the issue of immigration reform now that the recess is over. New developments in the war on drugs have prompted questions about how to best cooperate with Mexico. President Peña Nieto, still in his first year of governance, has adopted an ambitious plan for reform that provides the United States an opportunity to support its southern neighbor and thereby solidify relations. At the same time, however, China is busy reinventing its own relationship with Mexico, complicating the prospects for improved U.S.-Mexican relations. This means that the United States must act quickly in order to maintain its influence in Mexico and protect its national security interests.