The cost of supporting Ukraine is rising
Analysis by
Zachary B. Wolf, CNN
Updated 2:15 AM ET, Sat March 5, 2022
California gas prices reach $5 for the first time
(CNN)Americans and most of the world have been united in
condemning Russia for invading Ukraine.
Now they might have to start putting their money where their mouth is as US
lawmakers consider an embargo on Russian oil.
High inflation and rising energy prices amid the economy's pandemic recovery were already making life more expensive.
Now, a little more than a week into Russian President Vladimir Putin's war, California has become the first US state to have an average gas price above $5 per gallon.
Nationwide, US gas prices are "surging at a pace drivers haven't seen since Hurricane Katrina in 2005,"
writes CNN's Chris Isidore, adding that the national average record for gasoline -- $4.11, set in 2008 -- is within sight. That would be a huge jump from a year ago, when the national average price was $2.75 a gallon.
The average price of diesel is also skyrocketing, which will drive up transportation costs for businesses.
American lawmakers are pushing a bipartisan effort to end all imports of Russian oil and sanction Russia's energy sector.
That the energy sector has so far been left mostly untouched speaks to the nature of the global energy supply. Russia was the world's No. 2 oil producer last year, behind the US. A disruption in oil exports would drive up costs everywhere.
Politicians are willing to pay the price. "I'm all for that. Ban it," House Speaker Nancy Pelosi said this week on Capitol Hill.
"I would gladly pay 10 cents more per gallon," Sen. Joe Manchin, the West Virginia Democrat, said at a Thursday press conference.
US gas prices are already up more than three times that amount during the course of Russia's invasion of Ukraine. And energy traders, according to Isidore's report, are already shying away from purchasing Russian oil due to the war.
In a separate story, Isidore notes that many multinational companies, from Apple to General Motors, are going
above and beyond required sanctions. It's getting more difficult to find tankers willing to call on Russian ports and insurers willing to guarantee shipments -- which has created a "de facto ban" on Russian oil, according to one oil analyst.
Mostly symbolic. For the US, a ban on Russian oil would be mostly symbolic, since very little of the oil used in North America comes from Russia.
Sanctions by the US and other countries to stop Russian exports around the world would be much more costly, especially in Europe, which is fueled by Russian oil.
"Russian oil is not crucial to the US. It's crucial to Europe," Tom Kloza, global head of energy analysis at the Oil Price Information Service,
told CNN's Matt Egan. "I don't know what Europe is going to do without Russian crude. If you take it away, Europe is really behind the eight ball."
I asked CNN's polling director, Jennifer Agiesta, how Americans would react to a protracted hike in gas prices. She offered these thoughts:
Should gas prices be a consideration? A recent CNN poll conducted by SSRS after the Russian invasion of Ukraine began found that 71% of Americans want the government to take the impact on gas prices into account when deciding policies toward Russia, though only about a third (34%) say it should be a major factor in deciding those policies.
Republicans (45%) were more likely than Democrats (28%) or independents (30%) to feel it should be a major consideration. A Washington Post/ABC News poll completed partly before the invasion began found that 51% of Americans would support sanctions against Russia even if they resulted in higher energy prices in the United States.
Americans and most of the world have been united in condemning Russia for invading Ukraine. Now, amid high inflation and rising energy prices, they might have to start putting their money where their mouth is as US lawmakers consider an embargo on Russian oil.
www.cnn.com
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