Meanwhile, geopolitical events have contributed to concerns about potential supply disruptions, exacerbating the run-up in oil prices. It is reasonable to expect that oil prices will remain relatively high until some of the geopolitical uncertainty dissipates, world production capacity expands, and further conservation efforts take hold. Higher energy costs mean that it will be more expensive to produce many goods and some services.
It is not clear to what extent companies will be able to offset rising costs and limit price increases to consumers. What is clear is that economies need to adjust to these higher costs - and economic policies must support that adjustment.