Despite growing awareness of the risks posed by extreme climate change, the world’s collective hunger for the black gold has never been higher. According to the latest forecast from the International Energy Agency, demand is expected to reach a new record high of 102 million barrels per day this year.

In a note to clients, analysts at Goldman Sachs now predict that voluntary production cuts by major oil exporters Saudi Arabia and Russia could push the price of Brent up to hit $107 a barrel next December, even accidentally. 

“We think the producer group is unlikely to pursue prices well above $100/bbl,” it said in a report, citing among other reasons the political importance of U.S. gasoline prices.

The key is whether nine of the OPEC+ group of oil exporting countries, which include the two emerging economies, decide to extend through the rest of 2024 cartel-wide cuts of 1.7 million barrel per day announced in April, rather than reverse half of them.

Ever since dipping to nearly $70 per barrel in June amid U.S. debt ceiling talks, Brent rebounded to $90 for the first time since November on Tuesday after the Saudi monarchy warned markets it would maintain its own unilateral July output cut of 1 million barrels a day over and above what the cartel agreed, through the end of this year. Russia is adding another 300,000 to that figure on top.

Should the investment bank’s bleaker prediction prove true—rather than its base case estimate for year-end 2024 of $93—then this could quickly spiral into an election issue in next year’s campaign. 

Thanks to the low share of tax in U.S. gasoline prices, the low fuel mileage of American cars—predominantly made up of large, thirsty pick-up trucks and SUVs—and their longer daily commutes, Americans feel rising oil prices more acutely than elsewhere.

Moreover, a number of other energy commodities tend to take their price cues from crude, including heating oil, natural gas and electricity.

The increase in the cost of crude comes at a sensitive time for U.S. consumers. 

Pandemic-era savings that acted as a financial cushion have largely now been depleted and come October, university graduates are expected to resume servicing their federal student debt for the first time since COVID. This double whammy has economists predicting the U.S. could slip into a technical recession as early as the fourth quarter.  

Nor can the Biden administration likely resort to draining the country’s strategic reserves as the White House, at least not at the same pace as last summer. Levels have dropped to their lowest in 40 years.

“The President is focused on is just trying to do everything within his toolkit to be able to get lower prices for consumers at the gas pump in the United States,” national security advisor Jake Sullivan told reporters on Tuesday.