Russia’s invasion of Ukraine means U.S. drivers could pay more at the gas pump this spring.
“I don’t think we’re necessarily looking at the fuel apocalypse,” said Tom Kloza, global head of energy analysis with the Oil Price Information Service. “But we’re in for a few months of higher prices.”
Gasoline prices stood at an average of $3.819 a gallon in the Chicago metro area Thursday, up from $3.558 a month ago, according to AAA.
Kloza said gas prices could climb above $4 a gallon in Illinois. Prices could also jump nationwide with the Western states, where there is less refining capacity, posting the biggest increases.
It’s possible the highest prices will come in the next 60 days, with prices easing toward the end of the year.
“Right now, we’re going to get a little bit of a price shock,” Kloza said. “For the short term, you’re going to see noticeable increases in all sorts of fuel prices.”
Kloza said the gasoline price he worries most about is diesel because it can drive inflation.
“Everything that moves across the country is powered by diesel,” he said.
The price of diesel gasoline in the Chicago metro area averaged $3.962 a gallon on Thursday, up from $3.665 a month ago, according to AAA.
Although the sanctions that have so far been imposed on Russia don’t impede the flow of its oil and refined products, there is concern that could happen.
“Today’s reaction is very much a ‘what if’ reaction as opposed to (oil) being cut off,” Kloza said.
Russian produces about 10 million barrels of crude a day, which European countries rely on. The United States doesn’t depend on Russian crude, although some Puget Sound refineries use it, he said.
This week’s spike in fuel prices caps a stretch in which oil prices had been rising because of concerns about limited supply.
Up until February, rising oil prices “had everything to do with the perception that 2022 would see demand outstrip supply on a number of continents,” Kloza said. “This is more or less like sprinkling a cherry on the top.”
