Oil prices on Tuesday hit a near-three-year high amid energy supply shortages, the Wall Street Journal reported.
Brent crude oil, the global price benchmark, rose above $80 for the first time since October 2018. Oil prices have surged 11 percent over the last month as limited natural gas supplies have heightened demand for other fuel sources, analysts say.
"Oil's move is really to do with the global energy crunch coming out of the gas power market," Norbert Rücker, head of economics at Swiss bank Julius Baer, told the Journal. "This is now spilling over into the oil market because of the expectation that this energy scarcity means we're going to use oil for spillover demand."
The spike in oil prices is part of a broader increase in energy costs that has driven the country's inflation surge—energy prices have climbed 25 percent over the last year, the Labor Department reported this month. The elevated oil prices have also pushed up the average cost of gasoline, which rose from $2.186 to $3.187 over the last year, according to American Automobile Association.
President Joe Biden has faced criticism for the country's limited fuel inventory and steep inflation. His administration this year prohibited new oil and natural gas leases on federal lands and barred construction of the Keystone XL oil pipeline, which would have expanded the amount of oil processed in U.S. refineries.
Some economists warn that energy prices will continue to spike as demand for fuel increases in the winter months. Goldman Sachs expects the Brent oil benchmark to reach $90 by the end of 2021, the bank reported Monday.