MUSKEGON, Mich. — President Joe Biden warned of higher gasoline prices Tuesday after announcing the US would ban imports of Russian oil.
It marked the latest act of retaliation against Russia in the days since its invasion of Ukraine. Energy exports have sustained Russia's economy despite a series of financial sanctions. The President argued the US would “not be part of subsidizing Vladimir Putin’s war."
Gas prices, meanwhile, reached $4.25/gallon in Michigan Tuesday, a penny short of the all-time record.
If the US produces much of its own oil, however, why has the conflict caused domestic gas prices to surge?
THE QUESTION:
Viewer Brian from Muskegon wrote: “We are being told gas prices are rising because of the war in Ukraine? I believe this is not true because, "Overall, the U.S. consumes very little Russian oil… according to the American Fuel and Petrochemical Manufacturers Trade Association.””
OUR SOURCES:
- The US Energy Information Administration (EIA)
- Adrienne Woodland of AAA Michigan.
VERDICT:
False. While it’s true the US imports only a modest amount of oil from Russia, it is the world’s third largest producer overall, thus driving price points on a global scale, regardless of its respective share of US imports.
WHAT WE FOUND:
“Michigan's current average is $4.18/gallon for regular unleaded,” Woodland relayed. “That is up 61 cents compared to this time last week.”
At that pace, Michigan may clinch a new record this week, a fact no one’s celebrating.
A recent analysis from the EIA shows the US remains a net exporter of petroleum products, though experts expect it to import marginally more crude oil than it exports in 2022.
Even so, American companies have maintained an output of more than 11 million barrels per day, handily churning out more gas than any other nation on earth.
So, why’s that fill-up busting your budget?
“It’s global, it's bigger than just the United States,” Woodland said. “As the conflict continues, the oil markets will likely respond by increasing the price of crude oil to reflect more risk of disruption to a tight global oil supply.”
For decades the US has relied on imports to cover demand in excess of domestic supply.
As of 2022, the country’s largest suppliers and their respective contributions, according to the EIA, included:
- Canada (52%)
- Mexico (11%)
- Russia (7%)
- Saudi Arabia (4%)
- Colombia (4%)
While only 7 percent of America’s supply originates in Russia, experts stress it’s key to remember the ultimate price is based on global supply and a full 12 percent of that is Russian-made gas, according to the latest available data, which entails world-wide pricing impacts.
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