Fuel costs are the most visible evidence of burst inflation. They are impossible to ignore, with prices posted along the roadside on huge signs at every gas station. High gas prices are a big reason measures of consumer sentiment have dropped to all-time lows. There is no room for doubt that Russia’s war on Ukraine raised the retail price of a gallon of gasoline by at least a dollar in the U.S and much more in Europe. After Putin invaded, the West introduced financial sanctions that made it difficult to clear Russian oil transactions through Western banks. Russian oil normally accounts for about ten percent of the global oil supply, with the country being the world’s third-largest oil producer behind the United States and Saudi Arabia.
The U.S. government banned the import of Russian oil in early March as part of a sweeping economic response to the war in Ukraine, leaving less oil available to meet demand and hiking the prices. In April, the U.S. government predicted the average oil price to fall by the end of this year. President Joe Biden said Americans will have to stomach high gas prices “as long as it takes” to beat back Russian President Vladimir Putin’s invasion of Ukraine. Still, its price forecast was highly uncertain due to existing and future sanctions on Russia and how they will impact the global oil market.
“Oil is a globally traded commodity, and there are no easy substitutes for it,” said Jeff Barron, a petroleum industry economist at the U.S. Energy Information Administration. He added that Russia’s invasion of Ukraine has been “very disruptive” to the global market. The national average on Thursday stood at 4.86 dollars for a gallon of regular, down more than 8 cents from a week ago, according to AAA. .”The cost of oil accounts for nearly $3 for every $4.89 at the gas pump. Consumers should find more relief when fueling up if oil prices drop further,” AAA spokesperson Andrew Gross said in a statement. Worries about the rising risk of a global recession have reduced oil demand, with the price of crude falling to around $107 a barrel from $110 last week, the travel club noted in a news release on Monday.
Gas prices in the U.S. and other countries, with the average price hitting $5 per gallon. Labor shortages shuttered refineries, and the war in Ukraine has limited supplies, pushing prices even higher. High gas prices and other goods and services costs make it hard to evade the economic impact. On an elementary level, oil prices rise when demand exceeds supply. Several issues are affecting supply and demand and driving gasoline prices in 2022.