(NewsNation) — If the European Union decides to impose a ban on Russian oil, what kind of impact could that have on gas prices in the U.S.? NewsNation’s Nichole Berlie questions Patrick Dehaan, head of petroleum analysis at GasBuddy, about the matter:
Q: A complete ban, potentially, on Russian oil in Europe: Would American consumers see any kind of domino effects from that?
A: Well, they certainly could, because those European countries that would be shutting the door to Russian oil may have to knock on the door of some of the same countries that the US receives oil from. Essentially, it’s more hands in the cookie jar and less cookies in the jar. So today on the prospect that the EU is going to issue sanctions on Russia has oil, oil prices ended up jumping over five and a half dollars a barrel, on the worry that this is going to further imbalance supply and demand.
Q: What can we expect to see at the pump this summer, particularly if this ban does happen?
A: I think there will be more upward pressure. And as you alluded to, we have already seen the national average rise now for two straight weeks after declining for five. So things aren’t starting to heat back up, certainly not helped by this announcement or the prognosis that the EU is going to cut off Russian oil. I think it’s possible that we could rival the previous March high of $4.35 a gallon. And we could go beyond that, depending on exactly how the situation develops or continues to develop between Russia, Ukraine and Western countries responding to Russia’s invasion.
Q: With a national average of more than $4 a gallon, are we ever going to return to an average of less than $3 a gallon? Are these high prices really just the new normal?
A: I think there’ll be the new normal for the next couple of years, potentially. But keep in mind, oil is very much a boom bust cycle, of course, preceding COVID we were kind of in a bust cycle. And COVID kind of precipitated the return to a boom cycle, of course, helped by Russia’s invasion of Ukraine, So expect higher oil prices. But already we’re seeing the signs that oil companies are increasing production, and years down the road, that certainly could again lead to lower oil prices. So I don’t think those low prices are completely gone forever.