That’s how much the wholesale price of a gallon of gas had spiked in some parts of the U.S. by midday Tuesday because of the Russian invasion of Ukraine—a jump that’s likely to flow through to U.S. drivers before long.
The “absolutely ballistic” rise in gas futures (between 20 cents and 35 cents a gallon, depending on the location) is “coming soon to a pump near you,” said Tom Kloza, global head of energy analysis for Oil Price Information Service, an energy pricing company, in an email. A benchmark gasoline contract shot up to nearly $3.15 on Tuesday.
The price of gasoline rises along with the price of the crude oil it’s made from. While the latest round of U.S. sanctions against Russia didn’t formally limit the country’s oil industry, banks, merchants, shippers, and others in the industry may not play their part, perhaps out of concern they won’t get paid, Kloza said. There’s no way to know how much the supply of oil from Russia—the world’s third-largest producer—might be “constipated” by the issues, he said.
On Tuesday, the U.S. and the 30 other countries that are members of the International Energy Agency attempted to relieve the pressure with a 60-million-barrel release of oil from strategic reserves, but that “just doesn't resonate much on a planet that uses ~100 million barrels per day,” according to Kloza.
“This was the equivalent of using bubble gum to patch up a small hole in a boat, it won't last and was hardly worth the effort,” said Ed Moya, senior market analyst at OANDA, a trading and currency data company, in an email.
Increasing gas prices were widely predicted as a result of the conflict, with some saying we’d see $4 a gallon soon. The national average for regular unleaded has risen 24 cents in the last month, reaching almost $3.62 a gallon Tuesday, according to AAA. A year ago, it was $2.72 and during the initial crush of the pandemic in 2020, it dipped as low as $1.77.
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