Gas prices are growing every day, filling the minds of Americans with confusion and anxiety, as prices reached the $4 per gallon mark. However, analysts predict that the staggering growth will continue. Patrick De Haan, head of GasBuddy’s petroleum analysis, warns that all-time gas price records will be set soon. “Forget the $4 per gallon mark, the nation will soon set new all-time record highs and we could push closer to a national average of $4.50/gal. California could be heading for $5.50 per gallon with more stations charging $6 and beyond,” said De Haan. How does the Ukrainian crisis take a heavy toll on the warring countries and the distant United States alike? Our guest explains how the war in Ukraine impacts the gas prices in the U.S. and why Americans should prepare for the worse turn of events.
De Haan is an expert in matters related to historical pricing, predictive models, analysis, and forecasts in the oil and gas industry. At GasBuddy, he provides millions of Americans with relevant information and professional commentaries on gas price fluctuations. The correlation between Russian military intervention in Ukraine and such a significant spike in gas prices may be unclear to the U.S. public. After all, in 2021, the U.S. imported only about 8% of all U.S. oil imports from Russia. So, why do sanctions imposed as an answer to the military aggression of a relatively small oil supplier causes such a difference? De Haan explains: “We’ve never been in this situation before, with this level of uncertainty. As we lose a major global producer under the weight of deserving bipartisan sanctions for invading a sovereign country, the cost is high.”
So, gas prices keep rising because of global impact and unprecedented uncertainty. De Haan says: “We don’t import a lot, but somebody else does and we are making it difficult for Russian oil to flow to the global market, and prices are reacting to that.” The U.S. may cover the loss of Russian imports by pumping more oil or finding alternative suppliers. However, any reduction in global oil supply drives the prices in American gas stations higher. Economic sanctions are a double-edged sword — they cripple Russia and undermine its war machine but may also cause unpredictable, erratic counteractions from Putin’s regime. The potential alternative suppliers may also use an opportunity to squeeze concessions from the U.S. Any negotiations will likely take time, and the gas prices will stay high.
In summary, American car owners are literally paying to defend freedom in the globalized world. The relatively small volumes of oil imports from Russia do not matter much. We can compare the whole situation to a devastating earthquake. War in Ukraine and the U.S. sanctions against the Russian oil industry are the epicenter, and the skyrocketing gas prices are the aftershock. The situation has no swift solution, and any developments may lead to unexpected consequences. The only prediction that can be made with confidence — Americans should not expect improvements in the nearest time.