Russian invasion of Ukraine results in surging oil, gas prices

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Russia’s violent invasion of Ukraine has rocked the global oil market, with crude spiking above $100/bbl, a price last seen in July 2014, according to AAA Oregon.

The increase in the price of oil has led to higher pump prices in the U.S. with gas prices climbing in all 50 states.

For the week, the national average for regular jumps nine cents to $3.62 a gallon. The Oregon average rises a nickel to $4.03.

National State Local Gas Prices 3-1-22

The Oregon average climbed above $4 a gallon last Thursday, Feb. 24, for the first time since October 2012.

The national average is at its highest price since July 2014.

“Russia’s invasion of Ukraine and the responding escalating series of financial sanctions by the U.S. and its allies have given the global oil market the jitters with crude climbing above $100 per barrel.

Like the U.S. stock market, the oil market responds poorly to volatility and the unknown. It’s a grim reminder that tragic events on the other side of the globe can impact people around the world, including American consumers,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

Russia is one of the top three oil producers in the world, along with the U.S. and Saudi Arabia. Russia produces about 10 million barrels a day.

There are concerns that with the severe economic sanctions that the U.S. and other western nations have imposed on Russia, that it could retaliate by withholding oil from the global market.

Europe, in particular, depends on oil from Russia.

The world oil market is facing the same factors as many other industries – tight supplies and higher demand as economies around the world emerge from COVID-related economic slowdowns.

Crude is about $105 per barrel today, about $44 higher than a year ago. On average, about 53% of what we pay for in a gallon of gasoline is for the price of crude oil,12% is refining, 21% distribution and marketing, and 15% are taxes, according to the U.S. Energy Information Administration.

U.S. gasoline demand rose slightly from 8.57 million b/d to 8.66 million b/d.

Total domestic gasoline stocks decreased by 600,000 bbl to 246.5 million bbl last week, according to the U.S. Energy Information Administration (EIA).

The increase in gas demand and a reduction in total supply contribute to rising pump prices. But increasing oil prices play the lead role in pushing gas prices higher. Pump prices will likely continue to rise as crude prices continue to climb.

Travel continues to be impacted by the coronavirus pandemic. Find AAA’s latest COVID-19 information for travelers here.

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