Gas Prices Could Surge Again as Putin's Ukraine Invasion Roils Markets

Americans are growing increasingly worried about the possibility that high gas prices could rise even higher amid Russia's military conflict in Ukraine.

President Joe Biden addressed the American public about what he said was the "beginning of a Russian invasion of Ukraine" on Tuesday and said his administration was working to direct the "pain" of sanctions introduced in the wake of the latest military developments to "the Russian economy, not ours." The anticipated military escalation paired with Russia's role as one of the largest oil producers in the world has raised concerns among experts within the energy industry and American citizens alike about the impact this intensifying conflict could have on prices at the pump as crude oil costs rise.

Biden said Tuesday that his administration is "closely monitoring energy supplies for any disruption."

"We're executing a plan in coordination with major oil-producing consumers and producers toward a collective investment to secure stability and global energy supplies," Biden said, adding the efforts "will blunt gas prices."

"I want to limit the pain the American people are feeling at the gas pump," the president said. "This is critical to me."

American Automobile Association (AAA) spokesperson Andrew Gross said in a Tuesday news release that it is possible that Russia could decide to withhold oil from international consumers in response to sanctions imposed by the U.S. Doing so "would eventually be reflected in higher gas prices for American drivers," Gross said.

The U.S. is already experiencing rising gas prices, with nationwide averages estimated to be nearly $1 more per gallon than at the same time last year. In California, statewide average gas prices hit a new record on Wednesday of $4.752 per gallon after previously setting multiple record highs last week.

Gross told Newsweek there is "no way of telling" exactly how high gas prices could get.

"It really depends on Vladimir Putin, to be honest," he said of Russia's president. "If the only thing that happens is he puts troops in these areas where they've already been for a long time and everything just sort of stays, and he doesn't do a further full-on invasion of the rest of Ukraine, then you may see the market begin to respond a little more positively and you may see that upward pressure on oil prices ease up."

Some American consumers seem prepared to place the responsibility of rising costs at Putin's feet. One Politico/Morning Consult poll released on Wednesday found a greater number of Americans said they would blame Putin than Biden for rising gas prices amid the escalating situation in Ukraine.

Gross said any rise that Americans see in gas prices will not be permanent. "There is no shortage of oil in the world," he said. "It's just a matter of increasing the supply right now, getting it back into production."

Patrick De Haan, the head of petroleum analysis at GasBuddy, told Newsweek the situation in Ukraine is "making it more risky that oil supply could be disrupted if Russia retaliates to sanctions by curbing exports." He credited the current surge in energy prices both to the Russia conflict and to a "continued imbalance between supply and demand" amid the ongoing coronavirus pandemic.

"The pandemic greatly changed behavior—demand slumped early in 2020 with prices following, forcing oil companies to trim production," De Haan said. "Now demand has rebounded far faster than supply, pushing oil prices higher since 2021."

In a Wednesday morning tweet, De Haan said Russia's actions are impacting the cost of oil but again credited much of the recent rise in prices to the supply and demand shifts experienced during the pandemic.

"Oil prices have reflected the rising risk of a Russian move, so it's true that a small risk premium is already being paid at the pump, but most of the YoY [year-over-year] increase remains improvement in the pandemic," his tweet said.