Gas Prices are Being Raised…Again: How the War Between Russia and Ukraine Affects American Gas Prices

Gas Prices are Being Raised…Again: How the War Between Russia and Ukraine Affects American Gas Prices

Written by: Anna Syltie 

As the Russians continue to invade Ukraine, gas prices in the U.S. have skyrocketed once again. Although gas prices have been continually rising since the end of the first Covid-19 lockdown, they have begun to increase at a rapid rate due to the ongoing conflict overseas. The average global cost of a barrel of oil has risen to $115 per barrel, which is significant because this is the first time in seven years that the cost of a barrel has exceeded triple digits (Domonoske). As a result of these new prices, the average cost of gas per gallon across the U.S. as of February 28, 2022, is $3.701. Some experts even believe that gas prices will exceed $5 per gallon within the next couple of weeks across the United States. More populated areas, like Los Angeles, California, have already reached $5 per gallon, and are continuing up to $6 per gallon. 

The graph above from the U.S. Energy Information Administration shows recent increases in comparison to previous years. While the average is still below $4, we might see prices matching that of 2011 or 2014, or possibly even 2008 in the near future. 

Despite the U.S. only importing about 4% of its crude oil from Russia, it is still being impacted by this conflict as 35% of Europe relies on Russian crude oil and natural gas (Block and Koslof). In addition, about one-third of Europe's gas comes from pipelines that go through Ukraine, which could potentially be damaged in the conflict (FP Explainers). The U.S., along with 31 other countries, have agreed to avoid Russian energy supplies, including crude oil and natural gas, in an attempt to weaken Russia’s economy. By reducing the demand for Russian goods by use of sanctions, many countries are hoping Russia will end its invasion of Ukraine. In the meantime, many European countries have had to find alternative ways to obtain gas, including building more pipelines or borrowing from other countries.

In spite of everything going on, OPEC leaders met and decided that they will not respond to the situation at hand. This means that they will not reduce the price of an oil barrel, or increase their output of oil. They are attempting to stay neutral as “Russia is a key member of the OPEC+ alliance,” and other members are “enjoying the bumper revenues they get from high oil prices” (Domonoske).

As we’ve seen in the past, international conflicts impact more than just the countries involved, creating negative externalities for everyone else. Personally, I believe that the U.S. and other countries need to look for other sources of energy, as we have all seen the effects of a drastic cut to the current energy supply. We cannot always rely on oil to keep our nation running, especially when gas prices continue to rise. Moving forward, we need to invest in sustainable energy that can be developed here in the United States. With less of a demand for oil, we will be less reliant on OPEC or Canada—who we recieve most of our oil from—to support our energy-based needs. As the gas prices continue to rise, it becomes more evident that we need to invest in a more inexpensive and reliable energy source.

Works Cited

Block, Eliana, and Evan Koslof. “Fact check: Does the US buy oil from Russia?” WUSA9.com, 4 March 2022, https://www.wusa9.com/article/news/verify/verify-united-states-imports-crude-oil-petroleum-from-russia-not-major-source/65-ce3e3ff2-7078-4c40-b57f-3db1ca8e62a4. Accessed 5 March 2022.

Domonoske, Camila. “Oil prices surge as fears about Russian crude supplies intensify.” NPR, 2 March 2022, https://www.npr.org/2022/03/02/1083923886/oil-prices-gas-natural-gas-surge-russia-ukraine. Accessed 5 March 2022.

FP Explainers. “Russia-Ukraine crisis: What if Vladimir Putin cuts off gas supplies to Europe?” Firstpost, 2 March 2022, https://www.firstpost.com/world/russia-ukraine-crisis-what-if-vladimir-putin-cuts-off-gas-supplies-to-europe-10422171.html. Accessed 5 March 2022.

Horton, Jake, and Daniele Palumbo. “Ukraine conflict: How reliant is Europe on Russia for oil and gas?” BBC, 3 March 2022, https://www.bbc.com/news/58888451. Accessed 6 March 2022.

“US All Grades All Formulations Retail Gasoline Prices (Dollars per Gallon).” EIA, 28 February 2022, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m. Accessed 5 March 2022.