International Conflict Causes Further Increase in Oil Prices

If you have filled up at the gas pump recently, then you have probably noticed the drastic rise in the price of fuel. The cost of gas has increased at a daily rate. Currently, the average price of gas across the nation is well over four dollars per gallon, with no decrease of cost in sight. Even in Frostburg, the current gas price sits at around $4.20 per gallon. There are a variety of reasons why gas prices have skyrocketed over the past few weeks, but the root cause has been the Russian invasion of Ukraine.

 Prior to the invasion, the price of gas was increasing due to economic resurgence as COVID-19 restrictions began to lift. The price worsened after Russia began its assault on the eastern European nation, Ukraine. Details on this event have been covered in other articles by The Bottom Line. In the US, the previous highest average of gas was $4.11 in July of 2008 during a recession spurned on by several failing markets, such as housing and stock. This means that the current prices are the highest in the nation’s history. 

Oil, like any good or resource, is traded globally. Though, the case with oil is that it tends to be an excessively sensitive market and almost any disturbance can have a noticeable effect on prices globally. The United States imports a small amount of oil from Russia when compared to the European nations, but oil-rich countries still regenerate billions of dollars in profit annually. The recent imposing of economic sanctions against Russia has been one of many factors affecting the price of gas, though the announcement made by President Biden that the United States would forbid the sale or purchasing of Russian fossil fuels certainly did no favors.

The states with the most expensive gas prices currently include California, Hawaii, and Nevada, with the average price being somewhere around $5 per gallon. The states with the lowest gas prices in the nation include Kansas, Oklahoma, and North Dakota at under $4 per gallon. Despite national concern over rising prices with seemingly no end in sight, economic experts do not expect the price of gas to increase to six or seven dollars per gallon. Another drastic increase in price would only happen if another severe global event occurred that would strain fossil fuel supplies further. These same experts also estimate that gas production from other nations will not make up for Russia’s trade deficit.

As the conflict between Russia and Ukraine escalates, the cost of gas is not estimated to go down. There are a variety of ways for consumers to save on gas as prices continue to soar in the meantime. Using software to track the cheapest gas station prices, performing routine preventative maintenance on your car, and using public transportation are all ways that can help offset the price of fuel.