US gas station prices are up 14% over the past month.
Getty Images This story is part of the War in Ukraine, CNET’s coverage there, and the wider implications for the world.
Gas prices continue to rise by about 10 cents per gallon per day – on Saturday, the national average jumped another 9 cents to $3.92, according to the AAA gas price tracker. This is almost 10% more than just a week ago ($3.60) and almost 50% more than last year ($2.75).
California made the news on Friday when prices topped $5 a gallon – the first time this has happened in any US state. The national average is now just 19 cents below the record high of $4.11 in July 2008.
Energy analysts are predicting $4 a gallon across the country soon, due in large part to Russia’s ongoing invasion of Ukraine.
Here’s what you need to know about gas prices, including how high they can rise, how they’re affected by the Ukraine crisis and other factors, and what the Biden administration can do about it.
How much will gas prices rise?
Patrick DeHaan, head of oil analysis at price-tracking company GasBuddy, tweeted: on Monday that he estimates the national average will hit $4 a gallon on March 27th. However, at the pace of price growth this week, this could happen as early as Sunday, March 6.
Saturday prices are already averaging $5.18 a gallon in California and have crossed the $4 threshold in New York, Connecticut, Illinois, Oregon, Pennsylvania, Arizona, Nevada, Washington DC, Alaska and Hawaii.
Gas prices typically peak in the spring, DeHaan told ABC 12, as refineries undergo maintenance ahead of the summer driving season.
Analysts warn that average gas prices across the country could easily hit $4 a gallon or more this month.
MCCAIG
The cost of gasoline is strongly affected by the cost of the crude oil from which it is refined. On Friday, the price of Brent crude oil, the international benchmark, settled at $118.11 a barrel, up nearly 7% from Thursday.
For comparison, crude oil averaged about $74 per barrel in December 2021.
West Texas Intermediate crude, the US standard, rose 7.4% to $115.68, its highest level since September 2008.
Troy Vincent, senior market analyst at DTN, told CNET that “in a worst-case scenario where Russian gas and oil are completely excluded from the global market,” oil could rise to $130 a barrel or even higher.
Brent reached an all-time high of $147.50 in July 2008, helped by a strike by Brazilian oil workers and threats to supplies from Nigeria and Iran. At the time, average U.S. gas prices peaked at $4.11 per gallon.
If oil goes that high in 2022, $6.50 or even $7 a gallon won’t be outrageous, according to Vincent.
“However, at this point it will trigger a global recession,” he added. “People will start limiting their activities to the essentials.”
Does the US get oil from Russia?
Russia is one of the world’s largest producers of raw and natural gas, providing 10% of the world’s supplies and about 40% for the European Union.
While the US is the largest producer of crude oil and natural gas, it is also the largest consumer, producing over 18.6 million barrels per day while using over 20.5 million barrels per day.
Last year, the US imported roughly 245 million barrels of crude oil and refined products from Russia, up nearly 25% from 2020, making it the third largest external source after Canada and Mexico. In November alone, about 595,000 bpd, or about 7%, came from Russia.
The US imports more crude oil than it produces, and Russia is our third largest source.
Frederick J. Brown/AFP via Getty Images
While the West has imposed heavy economic sanctions on Russia for its invasion of Ukraine, only Canada has banned crude oil from the former Soviet Union. The US, Europe and other allies are hesitant to cut off access to a vital resource.
According to a Reuters/Ipsos poll on Friday, 80% of Americans support the idea of a ban on Russian oil imports.
Both Republicans and Democrats in Congress have called for such a ban, but they have different solutions to fill the gap: a GOP-sponsored bill calls for more U.S. drilling, while a separate measure from Green New Deal Senator Ed Markey promotes renewable energy sources.
“Our global dependence on oil keeps us trapped in dangerous cycles of conflict and corruption, but we can choose a cleaner path to peace,” Massachusetts Democrat Markey said in a statement.
Why are gas prices rising?
“The Russian invasion and the retaliatory escalation of financial sanctions by the United States and its allies have caused concern in the global oil market,” AAA spokesman Andrew Gross said on Monday. “Like the US stock market, the oil market does not respond well to volatility.”
The spike in gas prices is “a grim reminder that developments on the far side of the globe could have a ripple effect on US consumers,” Gross added.
But while the crisis in Ukraine has a direct impact, Vincent said it’s hardly the only factor. “For some time we had an imbalance of supply and demand, and it will continue regardless of whether this conflict disappears,” he said.
As with any industry, the pandemic has caused staffing problems at refineries. There have been disruptions, including a fire this week at a Marathon Petroleum plant in Louisiana.
A colder winter in North America has also boosted demand for fuel oil, and pandemic-driven online shopping has taxed the diesel that fuels all those trucks.
“Diesel demand has been well above pre-COVID-19 levels for months now,” Vincent added. “Strong e-commerce sales in the US mean all of these supplies need to be delivered to your home.”
What can the White House do to lower gas prices?
President Joe Biden has pledged to develop a strategy to “keep gas prices down” in the face of a Russian invasion, including releasing oil from the Strategic Petroleum Reserve, a deep underground storage facility on the Gulf Coast that holds about 600 million gallons of crude oil.
On Tuesday, the United States and other members of the International Energy Agency agreed to release 60 million barrels of oil from their strategic reserves, 30 million of which come from the United States.
President Joe Biden releases barrels from the Strategic Petroleum Reserve to offset rising demand for gas.
Brendan Smialowski/AFP via Getty Images
But many experts believe that 60 million barrels, which equates to about 12 days of Russian oil exports, will not matter much.
And the reserves released are mostly light oil — the US mostly imports heavier grades of oil from Russia. “You can’t always easily swap one for the other,” Stuart Glickman, an oil analyst at CFRA Research, told CNBC.
There have been calls for the US to continue investing in clean energy to rid us of dependence on foreign oil, but this will be a long-term strategy that is unlikely to affect prices in the near future.
Some lawmakers have called for a suspension of federal and state gas taxes — gas tax “holidays” — to help bring prices down. But economists warn that this will not affect the supply of oil and will only encourage consumers to travel more.
“It’s a way for politicians to pretend they’re making things better when they’re actually making them worse,” Maya McGuineas, president of the Committee on a Responsible Federal Budget, wrote in an article in The Hill last week.
How can consumers save money at filling stations?
There’s little we can do to change the price of gas, but drivers can cut back on unnecessary trips and look for a better price — even across state lines if it’s not inconvenient.
Apps like Gas Guru scan for the best gas prices in your area. Others, like FuelLog, track your car’s fuel consumption and can help determine if it’s getting decent fuel economy. In addition, many gas station chains have loyalty programs and credit cards have rewards programs that give you cash back on gas purchases.
Buy at the best price in your city.
Dangubik/Getty Images
Vincent of DTN advises not to save on gas and not to take other extreme measures, but calls for more funds for gas. According to him, high energy prices have been one of the main drivers of inflation for some time and will not disappear immediately.
“When the cost of crude oil rises, gas station prices tend to reflect that very quickly,” he said. “But gas prices tend to stay high longer even when oil falls.”