Russia-Ukraine Escalation Affects Gas Prices

The potential invasion of Ukraine by Russia is having a rippling effect on the global oil markets, sending crude oil prices higher, which in turn is driving up the price of gasoline in the U.S. Drivers in 47 states are seeing pump prices rise. For the week, the national average for regular rises four cents to $3.53 a gallon. The Oregon average adds two to $3.99.

A Russian attack would be met by severe financial sanctions led by the United States and its allies. Russia will likely retaliate by withholding oil from the world market, which is already tight and struggling to keep up with demand as nations worldwide move on from COVID-related economic slowdowns.

“Russia is one of the world’s leading oil producers along with the U.S. and Saudi Arabia. If Russia chooses to take its oil from the global market, that would create even tighter supplies which would result in higher gas prices for American drivers,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.

Crude remains above $90 per barrel, about $31 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 fell from 9.13 million b/d to 8.57 million b/d. Total domestic gasoline stocks decreased by 1.3 million bbl to 247.1 million bbl last week, according to the U.S. Energy Information Administration (EIA). Typically, a decrease in gas demand during the winter would put downward pressure on pump prices, but elevated crude prices continue to push pump prices higher.

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Oregon is one of 47 states and the District of Columbia where prices are higher now than a week ago. Ohio (+10 cents) has the largest weekly increase. Wisconsin and Nebraska are the only states with week-over-week declines and both are just two-tenths of a cent. The average in New Mexico is flat.

California ($4.74) and Hawaii ($4.52) continue to have the most expensive gas prices in the country and are the only states in the nation with averages above $4 a gallon, while all 50 states and the District of Columbia have averages above $3 a gallon.

The cheapest gas in the nation is in Missouri ($3.18) and Arkansas ($3.19). This week no states have averages below $3 a gallon, same as a week ago. For the 59th week in a row, no state has an average below $2 a gallon.

Oregon is one of 49 states and the District of Columbia with higher prices now than a month ago. The national average is 20 cents more and the Oregon average is six cents more than a month ago. This is the 5th– smallest monthly increase in the nation. Delaware (+36 cents) has the largest month-over-month increase. Idaho (-1 cent) is the only state with a month-over-month decline.

All 50 states and the District of Columbia have higher prices now than a year ago, and 11 states have a current average that’s a dollar or more higher than a year ago. The national average is 90 cents more and the Oregon average is $1.13 more than a year ago. This is the second-largest yearly increase in the nation. California (+$1.17) has the biggest yearly increase. West Virginia (+69 cents) has the smallest year-over-year increase.

Source: AAA

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