Gasoline prices will increase slightly in the coming weeks, and a larger price surge will push gas prices above the $4-per-gallon mark into near-record territory over the course of this year as the Russian invasion of Ukraine continues to affect oil supplies, according to a petroleum expert.
GasBuddy Chief Petroleum Analyst Patrick DeHaan said in a press conference Thursday that the conflict in Ukraine is driving prices up. Gas will increase by 5 to 10 cents in the next 1-2 weeks, he said.
DeHaan began his press conference with a report on the increase in the price of oil early Thursday. Oil prices rose overnight Wednesday and crossed the $100 per barrel mark for a brief period early Thursday morning amidst news of the Russian invasion of Ukraine, as The Daily Wire reported. West Texas Intermediate crude oil, which sets the U.S. price standard, jumped to $100.39 per barrel, while Brent crude, the international standard, rose to $105.60 per barrel early Thursday. Both prices receded throughout the rest of the day, but DeHaan noted that prices finished the day with an increase of about $2 a barrel.
The increase in oil price corresponded to an increase in the wholesale price of gasoline between 8 and 10 cents per gallon. The price hike for gasoline terminals and tanker trucks also meant that gas stations would have to plan on raising prices immediately. “The increase will likely play out over the course of the next several days as stations are filling up with the pricier fuel,” DeHaan said. “They likely will slowly raise their prices over the next 1-2 weeks.” Most states will see prices go up by anywhere from 5 to 10 cents a gallon over the next 1 to 2 weeks,” he added, noting that increases would continue if the conflict continues to drag out.
“The primary risk in this situation is Russia’s oil flow,” DeHaan continued. Russia was the second largest oil producer in the world in 2021, as The Daily Wire reported, producing 10.1 million barrels of oil per day. Russian imports of oil account for about 7% of U.S. oil imports overall. “The primary concern here is that Russia holds a significant portion of global oil production in its hands. Should the situation escalate, it’s not impossible that Russia may use oil as a weapon,” DeHaan said, adding that “Russia already used natural gas as a weapon” in talks with Germany over the Nord Stream 2 pipeline.
DeHaan went on to say that consumers could be paying $4 a gallon by April or May, saying that other factors besides the Russia-Ukraine conflict will drive up prices, including increased demand from warmer weather and the introduction of summer blend gasoline, which is more costly due to EPA regulations. These price hikes could begin in the next 4-6 weeks, DeHaan said. The price of gas could also approach or even break record highs. The previous record high of $4.10 could be broken as soon as May or June, DeHaan warned. He did however, allay fears of “apocalyptic” price surges to $5 or $6 a gallon, except for places like California with higher gas taxes. Even then, California would not breach the high end of those estimates unless the Ukraine situation escalated dramatically, he said.
Finally, DeHaan pointed out that rising gas prices would affect all sectors of the economy. “Gasoline prices are going up, diesel prices will go up, jet fuel prices will go up, and that means logistics, transporting goods, all of those prices will go up,” he said. “Airline tickets could go up. The price of anything delivered via truck, goods to the grocery store will see an increase. And services that rely on gasoline, whether that be things like Uber and Lyft and Instacart, you may see fuel surcharges tacked on those services in the coming days and weeks as well, as gas prices are likely to stay high.”