Michael Hakim Week 7 - US Gas Hits a Record $4.17 a Gallon

     As the Russia-Ukraine has continued to increase, so has the price of gas. As of Tuesday, March 8th, the price of regular gas has soared to a whopping $4.17 a gallon, topping the old record of $4.11 in July 2008.

     The price of gas rose 10 cents since Monday, three of those cents coming overnight. Since last week, the average price is up 55 cents a gallon! This is the fastest gas has risen in years, even topping the Hurricane Katrina oil crisis of 2005.

     According to Tom Kloza, who is the global head of energy analysis for the OPIS, these spikes in price won’t be ending anytime soon. He predicts that “we'll hit $4.50 a gallon before it turns around” and that “even $5 a gallon nationwide is possible.”

     As for why the price of gas is surging so high? The simple answer to this is that Russia is one of the biggest producers of oil in the world, with a good percentage of the oil going to Europe and Asia. In December, Russia’s oil only made up around 2% of US imports, but because oil's price is based on global commodity markets, the impact can be felt all across the world. The various sanctions placed on Russia after their invasion of Ukraine aren’t directly exempting oil exports. However, they have caused traders to not want to purchase Russia’s oil due to the sanctions on Russia’s banking sector.

     Currently, there is the potential for a ban on Russian oil by various European countries and Japan, and if this were to occur, the impacts on global oil markets would increase in severity even more. Though 28 states have gas prices that average over $4, California tops the charts with a statewide average of $5.44 a gallon.

     Inflation being up 7.5% in the past year hasn’t helped in this situation, and it is definitely unfortunate timing, as many families have had financial struggles from this alone.


What do you think the price of gas will peak at? Why?





Comments

  1. AnonymousMar 11, 2022, 5:46:00 PM

    I honestly have no idea what the gas price could peak at. I think it all depends on what happens with this war between Ukraine and Russia. The more this goes on I think the higher the prices will get. I also keep thinking about how this could affect everybody personally. No gas means no car. That is really hard when you live in Florida and everything is roughly 20 minutes away or more. This whole situation is a real mess and I hope it's over soon for everyone's sake.

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