The beginning of 2022 marked an optimistic recovery from the pandemic’s crippling economic effects. Then, on Feb. 24, Russia invaded Ukraine.
The United States and its allies quickly responded by imposing heavy sanctions on Russia, but many believed the sanctions were insufficient. On March 8, President Joe Biden took further measures when he announced a ban on all Russian oil, natural gas, and coal imports.
“This is a step that we’re taking to inflict further pain on Putin, but there will be a cost as well here in the United States,” Biden said in a briefing.
The cost came in the form of soaring gas prices— America’s national average for regular gas rose a bewildering $0.61 within a week, according to the U.S. Energy Information Administration (EIA).
A Reuters/Ipsos poll from March 4 had revealed that 62% of respondents were willing to pay for more fuel and gas, and an equally bipartisan 80% supported the U.S. to stop buying oil from Russia. However, as people began experiencing the effects of such policies, eagerness gave way to concern and skepticism.
“Massive increases in gas prices isn’t good news, especially because of my family’s financial situation,” said Darrell Ye, a sophomore at Carlmont. “I support the principle of the oil ban, but Russia exports oil to so many different countries that I feel like it won’t matter too much if they don’t sell to us.”
The increased gas prices are also fueling America’s inflation crisis. Economists are seeing typical trends of recession, such as an inverted yield curve, and many have expressed grave concern for America’s economy.
“Many people of low income just don’t have enough money for groceries and gas purchases right now. All these prices are just going up, so it will be very hard for them and on our local economy if the war continues for longer,” said Frank Xu, co-founder and secretary of San Diego Asian Americans for Equality.
The Biden Administration quickly placed responsibility for this month’s record-high prices on Russian President Vladimir Putin, though America has been experiencing a steady incline in inflation since 2021, long before Russia invaded Ukraine (U.S. Bureau of Labor Service).
“Today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases, and families are starting to feel the impacts of Putin’s price hike. A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions,” Biden said in a statement from last Tuesday.
Biden responded to rising gas prices by securing a release of 60 million barrels of oil from reserves. Considering Americans consume about 20 million barrels a day (b/d), many doubt the effectiveness of such measures.
Relief finally came when national gas prices began to fall this week, starting on March 15. According to the EIA, a drop in gas demand from 9.94 million b/d to 8.94 million b/d, along with growth in domestic crude oil inventories, contribute to the decreasing prices. However, it may take substantially longer to see this reduction at the pump, especially in California.
“Nobody knows how things are going to play out. Gas prices might be easing up right now, but inflation is still happening,” Xu said. “If the war drags on, there’s a high chance of recession and stagflation.”
