OPEC's Oil Production Cut Could Hit These Areas Hardest at the Pump

After weeks of declining gas prices, Americans are seeing prices start to rise again. Some will feel the increase more than others.

Wednesday's decision by Organization of the Petroleum Exporting Countries (OPEC) to reduce oil production by up to 2 million barrels a day is already being felt by Americans. Some experts are saying there will be short-term and long-term increases, depending on the global response to the cut.

A price increase is bad news for U.S. President Joe Biden's administration, which spent the summer chasing the numbers at the pump heading into the midterm elections.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, expects the price increase to be in the "10s of cents," and some states will be more vulnerable than others to the increase.

Ziemba told Newsweek that price increases will most likely be seen in states where gas typically costs more, such as California and the Pacific Northwest. Northeastern states also could see a steeper increase if a harsh winter increases demand for heating oil. Other factors contribute to who will see the higher increases, such as hurricane season affecting oil supplies in the Gulf of Mexico.

"This is not happening in a vacuum," Ziemba said. "The direction of travel for U.S. gas prices is up, but probably not a lot in the short term. We have had a decline over the last couple months through most of the summer and we are already starting to see the price inch up in the last couple weeks."

Emma Ashford, a senior fellow at the Stimson Center, told Newsweek that gas prices began to climb in advance of OPEC's decision, as rumors about the oil production cut began to circulate. She said it remains to be seen if gas prices will continue to climb to "excessively high" prices or if they will level out.

"I think it depends a lot on what the Biden administration does in response," she said. "There is a lot of uncertainty in the energy markets right now. Nobody is very sure what's coming."

Ziemba said she hasn't run any simulations about what kind of increase Americans will see, but she expects the increase to be modest. Still, any increase in gas prices isn't viewed as positive.

"They're settling at a price a lot of U.S. political actors see as still high," she said.

Ziemba expects prices will further be affected if the European Union agrees on a price cap for oil. European Commission President Ursula von der Leyen will meet with EU leaders this week to discuss capping gas prices in hopes of weakening increasing energy costs.