Gas prices in the United States are climbing to their highest level since 2008, as Russia’s invasion of Ukraine disrupts the global energy market.
The average price of a gallon of gas reached $4.065 on Monday, according to AAA, a 57-cent increase from a month ago. The all-time high was in July 2008, when the average price hit $4.114 a gallon. (When factoring inflation, that would be equivalent to $5.25 a gallon today.)
Russia’s increasingly violent war against Ukraine, forcing more than 1 million residents to flee, has set off intense volatility in the energy markets, partly because Russia provides 10% of the world’s oil and more than a third of the natural gas consumed in the European Union.
Some refineries and traders have stopped buying crude oil from the country, even shipments being offered at a deep discount. Refiners, shippers, insurers and banks are pulling back because they are afraid of running afoul of sanctions by dealing with Russia. Ukraine’s leaders are calling for countries to stop buying Russian oil, and American politicians have begun to endorse that action.
The price of Brent crude, the international benchmark, rose 7% to $118 a barrel Friday. In early December, it cost about $65 a barrel.
Gas prices had already been climbing during the pandemic, partly as a result of fluctuations in supply and demand. The steeper prices have pushed people to rejigger household budgets, sometimes by forgoing leisure activities and in other cases by cutting back spending on essentials. High gas prices are helping to feed inflation, which reached a 40-year high in January.
Economists expect that the consumer price index, a closely watched measure of inflation that is coming out Thursday, to show that consumer prices rose 7.9% in the year through February and 0.8% from the previous month. That would be up from 7.5% in the year through January, showing that inflation has not yet peaked.