US Gas Prices Keep Rising After Russian Invasion of Ukraine: How High Could They Go? – CNET

US Gas Prices Keep Rising After Russian Invasion of Ukraine: How High Could They Go? – CNET

gas prices

The ongoing conflict in Ukraine is playing out at the gas pump in the US.

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Gas prices across the US have continued to rise a day after Russia’s invasion of Ukraine. On Thursday morning, the national average was $3.54 a gallon, according to AAA, compared to $2.65 one year ago.

By Friday afternoon, it had reached $3.57. 

The national average could easily click past $4 a gallon by mid-March, Tom Kloza, an energy analyst for the Oil Price Information Service, told CNN on Thursday.

In California, prices on Friday morning already averaged $4.79 a gallon, up 2 cents from Thursday. They’ve passed the $4 mark in Oregon and Hawaii as well.

Earlier on Thursday, crude oil — which is refined to make gasoline — reached a high of $105.79 a barrel, the first time it rose above $105 since 2014. Before noon Eastern time on Friday, it had cooled somewhat to $90.86 a barrel. But the spike in wholesale gas prices will likely hit consumers in a matter of days, Kloza said.

Russia, one of the world’s largest producers of crude and natural gas, provides 10% of the global supply and roughly 40% for the European Union. Sanctions by the US and Europe will undoubtedly impact access to that supply, as will violence in Ukraine, a critical hub for oil and gas shipments.

Here’s what you need to know about how the Ukraine crisis is impacting gas prices, including options for offsetting rising costs.

For more, find out what Russia’s invasion means for the US economy and learn about cyberattacks against Ukraine and the threats to other countries

Where are gas prices headed?

Should the conflict in Europe drag on, DTN energy editor Brian Milne agrees average prices at the pump could easily hike up to $4 a gallon nationwide by the next week or two, he told MarketWatch.

When oil prices last climbed to $100 a barrel in 2014, gasoline prices ranged from $3.50 to $3.85 a gallon.

Gas PumpGas Pump
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But energy analyst Dan Dicker told Yahoo Finance last week that a sustained price of $100 a barrel would translate to $5 a gallon at the pump in 2022.

Dicker cautioned that the ongoing Ukraine conflict could push the price of crude as high as $150 a barrel.

When crude oil prices last neared that benchmark — reaching $147.27 in July 2008 — average prices at the gas station peaked at $4.10. That increase was spurred by a strike by Brazilian oil workers and threats to the oil supply from Nigeria and Iran.

This time, Dicker said, Americans could be shelling out $6.50 or even $7 a gallon. 

Does the US get oil from Russia?

Oil fieldsOil fields

The US imports more crude oil than it produces, with Russia our third-biggest source after Canada and Mexico.

Frederic J. Brown/AFP via Getty Images

While the US is the largest producer of crude oil and natural gas we’re also the largest consumer, producing over 18.6 million barrels a day while using over 20.5 million.

Last year, to make up the deficit, the US imported 8.5 million barrels of crude daily. In November, about 595,000 barrels per day, or roughly 7%, came from Russia — making it our third largest outside source after Canada and Mexico. 

Sanctions against Moscow could reduce the availability of Russian crude in the US and cause prices of gasoline and petroleum products to rise.

What can the US do to offset rising gas prices?

President Joe Biden said on Tuesday he was developing a strategy to “blunt gas prices” in the face of Russian incursion.

Joe BidenJoe Biden

President Joe Biden is releasing barrels from the Strategic Petroleum Reserve to offset rising gas prices at the pump.

BRENDAN SMIALOWSKI/AFP via Getty Images

In a televised address on Thursday, the president said he was releasing barrels from the Strategic Petroleum Reserve, a deep underground storage complex along the Gulf Coast that holds an estimated 600 million gallons of crude.

“I know this is hard and that Americans are already hurting,” Biden said. “I’ll do everything in my power to limit the pain the American people are feeling at the gas pump.” 

Biden also on Thursday announced a series of severe sanctions against Russia aimed at ending the incursion, which would help return oil and gas prices to more normal levels.

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