Gas prices have been at their highest level in nearly eight years, and experts warn they could rise further if Russia begins a full-scale invasion of Ukraine.
In one Los Angeles Chevron Station, the price of the ordinary unleaded product was set at $ 6,219 on Wednesday when it was spotted by an AFP photojournalist.
The average national price of regular gasoline reached $ 3.53 on Tuesday, up 21 cents from a month ago and 90 cents from a year ago, according to the AAA gas price index.
California leads the nation on gas at a staggering $ 4.74 a gallon, and the average price in Los Angeles County is $ 4,796.
Experts say the movement of Russian troops in eastern Ukraine has a ripple effect on the oil market, which in turn raises the price of gasoline in the United States.
At a Chevron station in Los Angeles, the price of ordinary unleaded was announced at $ 6,219 on Wednesday
The average national price of regular gasoline reached $ 3.53 on Tuesday, 21 cents more than a month ago and 90 cents more than a year ago
A full-scale Russian attack will be met with severe financial sanctions by the United States and its allies.
Russia can retaliate by holding back oil from a global market that is already limited and struggling to keep up with demand as the global economy recovers from the COVID-19 pandemic.
“Russia is one of the world’s leading oil producers, after only the United States and Saudi Arabia,” AAA spokesman Andrew Gross said in a statement.
“And if they decide to keep their oil on the world market, such a move will eventually result in higher gas prices for American drivers.”
Faced with rising inflation and gas prices, the Biden administration is considering proposals to suspend the federal gas tax, which will save drivers 18.4 cents a gallon on standard gas.
Oil prices crept to $ 100 a barrel amid Ukraine’s crisis, reaching levels never seen before in 2014.
On Wednesday, US crude oil futures in West Texas (WTI) rose $ 1.58, or 1.7 percent, to $ 93.47 a barrel after hitting $ 96 on Tuesday.
Crude oil prices in the United States rose 1.8 percent and increased energy reserves
A man pumps gas in his car at a gas station in Montebello, California on February 23, 2022, as gas prices exceed $ 6 a gallon at some stations
Brent’s global crude oil benchmark rose $ 1.48, or 1.5 percent, to $ 98.32 a barrel after hitting $ 99.50 on Tuesday, its highest level since September 2014.
The crisis in Ukraine is also affecting stocks. After opening higher on Wednesday for the first time in five trading sessions, all major US stock indexes gave up early gains and turned into negative territory.
The S&P 500 benchmark fell further after falling into “adjustment” territory, or 10 percent below its previous peak.
The last correction of the index was in the spring of 2020, as the pandemic overturned the world economy.
This adjustment worsened in the bear market – a decline of 20 percent or more – as the S&P 500 sank by almost 34 percent in about a month.
Wall Street is closely following events in Ukraine, where Russia has mobilized troops for a potential invasion.
Ukraine declared a state of emergency on Wednesday, telling its Russian citizens to flee as Moscow began evacuating its embassy in Kiev on the latest ominous signs of Ukrainians fearing a full-scale Russian military attack.
The S&P 500 benchmark falls further after collapsing in “adjustment” territory or 10 percent below its previous high
Oil prices are rising due to fears that sanctions imposed by Russia’s western states after sending troops to two breakaway regions in eastern Ukraine could affect energy supplies.
Sanctions imposed by the United States, the European Union, Britain, Australia, Canada and Japan have targeted Russian banks and elites, while Germany has suspended certification of a gas pipeline from Russia.
But the United States has made it clear that sanctions have been agreed and those that may be imposed will not target oil and gas flows.
However, analysts expect oil prices to continue to receive support from the Russia-Ukraine crisis, with some Western countries promising to impose more sanctions if Russia launches a full-scale invasion.
Gas prices are seen in the Venice neighborhood of Los Angeles on Tuesday
“The prospect of more conflict in Ukraine must protect the geopolitical risk premium,” said Stephen Brennock of brokerage PVM Oil.
“There is a risk that Russia will respond to the sanctions by cutting supplies at will,” said Commerzbank analyst Carsten Fritsch.
The potential return of more Iranian oil to the market weighs on prices as Tehran and world powers approach the resumption of a nuclear deal.
“The nuclear talks in Vienna are reaching a sensitive and important point,” Iranian Foreign Minister Hossein Amirabdolahyan said on Wednesday.
However, analysts say there is little chance that Iranian crude oil will return to the market in the near future to ease current supply restrictions.
“If an agreement is reached between the United States and Iran, it will ease some of the pressure, but not enough to stop oil prices from reaching three-digit levels,” said Pratibha Tucker of the Economist Intelligence Unit.