California gas prices and the Ukraine crisis

California gas prices and the Ukraine crisis

Russia’s intention to escalate its invasion of Ukraine became clear. Soon after Vladimir Putin announced late Wednesday that he would proceed with a military operation, loud explosions were heard outside Kyiv.

It’s not every day that Russia impacts life in California, but I bet you have already noticed how the conflict is impacting the state’s residents.

“The average price paid for a gallon of regular gas across California hit a record high of $4.742 on Tuesday, according to the American Automobile Assn. That figure is the highest in the country and more than $1 higher than the national average, which currently sits at $3.531 a gallon,” The Times reported.

Unfortunately, things may get worse; some forecasters expect the average price to top $5 a gallon in the near future.

You might be wondering why the Russia-Ukraine conflict is raising gas prices for the state. Here’s what you should know.

Why the latest conflict impacts Golden State gas prices

Russia is the world’s third-largest producer of petroleum and other crude oil, 2020 data from the U.S. Energy Information Administration show. As you may have heard, President Biden recently announced sanctions on Russia by the U.S. and Europe. Some fear these steps could cause those energy exports to drop.

“As we respond, my administration is using every tool at our disposal to protect American businesses and consumers from rising prices at the pump,” Biden said in an address Tuesday announcing the sanctions. “As I said last week, defending freedom will have costs for us as well, here at home. We need to be honest about that.”

California actually doesn’t import any oil from Russia. As of 2020, the state received 24% of its oil from Ecuador, 23% from Saudi Arabia and 20% from Iraq, according to the California Energy Commission.

But that’s how tricky the geopolitical logistics are. The loss of such a major exporter would shrink global supplies, which could affect the retail price in California.

Our state has also become more and more dependent on oil imports as we try to move away from fracking, making us more vulnerable to external price swings.

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