The Russia-Ukraine conflict could soon drive up gas prices even further
LWe hope you won’t be planning a road trip any time soon. Gas prices in the US have risen for eight straight weeks and the cost of refueling is expected to only get more expensive because of the Ukraine-Russia conflict.
The average price for a gallon of regular gasoline nationwide on Tuesday was $3.53, according to AAA. That’s an increase of 21 cents from last month and a whopping 90 cents more than at this point in 2021.
High gas prices have been hitting consumers’ budgets for months. In October, prices at the pump hit a seven-year high averaging $3.27 a gallon, and they’ve only increased since then.
Other types of gas and oil prices have also skyrocketed, and the result has been unusually high heating bills for people across the country.
All of these price hikes are due to rising energy costs — especially wholesale crude oil. Brent crude, a benchmark for global prices, is approaching $100 a barrel this week. That’s up from an average of about $87 in January and $75 in December, according to the federal US Energy Information Administration (EIA).
Why are oil and gas prices so high?
Why are oil prices rising? There are many factors, but the gist is that global oil supply has not kept pace with demand, which has risen since the world slowly reopened in the second half of 2020 after the worst of the pandemic shutdowns ended.
More recently, tensions along the Russian-Ukrainian border have pushed up oil prices. The US and its allies have said they will impose sanctions on Russia if it invades Ukraine, an AAA report said on Tuesday. In that case, Russia could take countermeasures to push oil prices further higher.
“Russia is one of the top oil producers in the world, behind only the United States and Saudi Arabia,” Andrew Gross, spokesman for the AAA, said in the Post. “And if they choose to withhold their oil from the world market, such a move would ultimately be reflected in higher gasoline prices for American drivers.”
At a Tuesday afternoon news conference, President Joe Biden said he wanted to make sure the US economy was not hurt by sanctions against Russia, adding that he was “closely monitoring” energy supplies.
“We are executing the plan in concert with major oil-producing consumers and producers for a joint investment to ensure stability and global energy supplies. This will dampen gas prices,” Biden said. “I want to limit the pain that the American people feel at the gas pump.”
Drivers had been tricked into believing that gas prices would move in the opposite direction in early 2022. The EIA forecast that gas prices would fall to about $3 a gallon in January based on a parallel forecast drop in oil prices.
Obviously that never happened.
Instead, gas has steadily become more expensive, and experts believe the pace of fuel costs could soon pick up.
“The coming weeks could get pretty ugly with rising prices, especially if Russia pursues an invasion of Ukraine with powerful weapons,” Patrick De Haan, head of petroleum analysis for the GasBuddy app, said in a post this week, noting that that gas prices have already risen nationwide for eight consecutive weeks.
Some industry analysts have speculated that oil prices will soon surge above $100 a barrel and perhaps reach $120 at worst. The last time oil prices came anywhere close to this mark was in 2014, when the average gallon of gasoline was often more than $3.70 across the country.
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