Oil Expert Weighs In on How High Gas Prices Could Soar

by Allison Hambrick

One energy strategist warns that consumers need to brace themselves for higher gas prices amid the Russia-Ukraine conflict. Russia produces 10% of the global demand for gas, which equals roughly 10 million barrels of oil a day. The escalation in relations between the two states disrupts the supply chain of fossil fuels.

“My guess is that you are going to see $5 a gallon at any triple-digit [oil prices] … as soon as you get to $100. And you might get to $6.50 or $7. Forget about $150 a gallon, I don’t know where we will be by then,” Energy Word founder Dan Dicke told Yahoo!. According to him, oil prices run the risk of reaching the same levels as 2007. This would put the price of a barrel around $150 each, while current prices are at $94 per barrel.

In layman’s terms, that would be roughly 5 more per gallon. Current gas prices are elevated to $0.80 more per gallon, with an average of $3.47. So in theory, prices could be upwards of five dollars if things continue at the current rate of inflation. Fuel prices are nearly 40% higher than this time last year.

“Not only are oil prices up, but the bulk of the nation is starting the multi-month transition to summer gasoline, further adding to the rise at the pump,” said Patrick De Haan, Gasbuddy head of petroleum analysis. “In addition, cold weather in Texas last week caused some power outages at major refineries, further weighing on markets. I see no other potentials in the short term but additional price increases unless Russia does an about-face on Ukraine. Even then, we’ll still see seasonality push prices up, so motorists should be ready to dig deeper.”

Gas Prices Increase Across the United States

Over the past week, gas prices have uniformly increased across the entire country. AAA spokesperson Andrew Gross explained that a number of factors go into the increase of gas prices. Firstly, the price of gas is largely based on that of crude oil. Currently, the price of crude oil depends on geopolitical issues such as the Russo-Ukrainian War.

Secondly, gas prices are affected on a state-by-state basis. Gross clarified that state and local taxes contribute to prices, as do distribution costs. Consumers who live farther from the source will inevitably have to pay more than others do.

“Some states have higher taxes,” said Gross. “Some states are further from the source, so you have to figure in gasoline, transportation, and distribution costs. That’s why you see this big difference when it comes to gasoline pricing.”

While it remains to be seen how gas prices will be affected, the brewing tensions in Eastern Europe aren’t exactly a good omen.