Daily gas and diesel prices in the U.S. since February 2022
A period of price instabilityOn February 24, 2022, Russia invaded Ukraine, and, in response to the resulting conflict, Western countries have imposed economic sanctions against Russia. On March 8, the U.S. banned Russian crude oil imports; however, despite gas and crude oil embargoes being forecast as hitting Russia the hardest, most European countries have not yet put embargoes on the trade of energy. As the war lengthens and international relations between the West and Russia further deteriorate, uncertainty over the supply of oil and gas is increasing, and the price of motor fuels may continue to rise.
Russia is the third largest crude oil-producing country worldwide, representing around 12.1 percent of the total output in 2020; that same year, Russia was the second-largest exporter of crude oil, with reported revenue of around 72.6 billion U.S. dollars. As sanctions strengthen, Russia's leading position in the global crude oil market creates the conditions for a continued increase in crude oil prices and, by extension, gasoline prices in countries depending on its exports.
The U.S.'s dependence on Russian crude oilIn 2021, one of the leading countries of origin for U.S. petroleum imports was Russia, behind only Canada, Mexico, and Saudi Arabia. However, due to the U.S.’s increase in national production through hydraulic fracking, this was not a record year for finished motor gasoline imports to the United States. The leading oil and gas companies in the country are U.S.-based, with most extraction operations conducted in the region.
The U.S.'s dependence on Russian crude oil is relative, and the increase of regular gasoline and diesel prices was pre-existing: Monthly gas prices in the United States have been steadily rising across all types through 2021 and 2022, due to the impact the COVID-19 pandemic has had on crude oil prices. However, the war in Ukraine adds another layer of uncertainty in a market that cannot be protected from price disruption. Even with adequate physical supply and self-reliance, inflation is tipped to gain steam in the following weeks.