How Russia's invasion of Ukraine impacts Ohio's gas prices

Posted at 6:40 PM, Mar 07, 2022

COLUMBUS, Ohio — Ohioans have seen it at the pumps, but they’ve definitely felt it in their pockets. Gas prices are now more than $4 in Northeast Ohio, which is a $.57 increase over the past month, according to AAA.

“Russia has created an international energy crisis with its invasion of Ukraine,” said Scioto Analysis Principal Rob Moore.

The cost of one barrel of crude oil is $120 now. It was $100 before the invasion of Ukraine, so there has been a 20% increase.

“We are approaching the highest average gas price in the United States ever right now,” he added.“High gas prices are increasing just so historic levels in the United States, and it's precipitated by Putin's war.”

Back in 2008, gas rose to $4.11, but with calculating inflation, that would be about $5.37 in 2022.

Chart showing the weekly Ohio price of all formulations of retail gasoline, 2003 to Feb. 28, 2022.

“We are over $4 a gallon in the United States overall, a little bit lower in Ohio like we usually are – but the top was $4.11,” he said.

Ohio’s average is a bit lower than other areas because the state has a bit less population density than in some other parts of the country, Moore added. He was mainly excluding larger cities in the Northeast like Cleveland. Ohio's massive natural gas reserves have also been helping, he said.

The United States imports 1.4% of crude oil from Russia, which is less than the imports from Ghana, Moore added. Including other petroleum products, the U.S. imports less than 5% total of fuel.

But it is important to take a look at the global perspective. Europe imports about 60% of their fuel from Russia, with China importing about 20%, Moore said.

“What we're seeing is a direct result of European oil customers looking beyond Russia to import their oil; that's causing world prices to go up,” said Michael Goldberg, Executive Director of the Veale Institute for Entrepreneurship at Case Western Reserve University. “It's directly impacting the world oil prices, even if we in the U.S. are not importing much Russian oil ourselves”

There is now an international scramble to import energy. Some legislators from the U.S. want to throw their hat in the ring.

“Securing America’s energy independence is both an economic and national security imperative,” said Congressman Dave Joyce (OH-14) in a press release Monday. “By unleashing our domestic oil and gas production we can weaken Putin’s position of power, provide Americans with affordable energy, and reduce global CO2 emissions.”

Republican legislation co-sponsored by Joyce is aiming to strengthen America’s energy independence by accelerating oil and natural gas production in the U.S. However, neither Goldberg nor Moore are convinced provisions in the bill would even work.

Gas prices
Hold For Biz—In this Sunday, Oct. 24 2021, photograph, pump prices are posted on a sign at a Conoco station in southeast Denver. (AP Photo/David Zalubowski)

“It's not as easy as political leaders often make it out to be, in terms of just sort of flipping a switch and allowing for more fossil-fuel-based energy to be drilled,” Goldberg said. “I think folks want to see their political leaders taking action, but in fact, there's not a ton that they can do to really ameliorate high gas prices in the short term.”

The American Energy Independence from Russia Act would require the Biden Administration to create an energy security plan within 30 days and “take action to unleash America’s oil and natural gas production to offset Russian energy import.”

The bill doesn’t specifically reference gas prices, but many GOP lawmakers, like Sen. Chuck Grassley (R-Iowa), stated it will “take critical steps to lower gas prices and unleash energy production.”

The bill would reauthorize the controversial Keystone XL pipeline, which was halted by President Joe Biden in 2021 after a decade of protests from indigenous communities and environmental activists.

RELATED:Keystone XL oil pipeline halted as President Biden revokes permit

The bill would also resume oil and gas leasing on federal lands and water. Other provisions include increasing U.S. LNG exports to boost natural gas production, and prohibiting freezes of new energy leases, permits, approvals or authorizations for oil and gas, coal, hard rock and critical minerals. So far, no Democrats have signed on to the bill.

Starting up these projects could take years, and Moore added that they likely wouldn’t even be available during the invasion of Ukraine. Producing more clean energy, like solar and wind, would eventually allow the U.S. to not depend on any other country, but even that would take many years, he said.

In the short term, no – Ohio gas prices will not be going down drastically. In the long term, the price of gas could go down if the demand for oil goes down. The world would either have to remove sanctions so there are more oil producers or switch to products that don’t use oil – like electric vehicles.

RELATED: Rising gas prices lead to increased interest in hybrids, EVs

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