Nearly two months have passed since Russia’s unprecedented invasion of Ukraine. Russian President Vladimir Putin has continually utilized oil as a mechanism to strategically bolster Russia’s continued attacks against Ukraine. Accordingly, the American government has sanctioned Russian oil in hopes of abating the Russian economy and preventing further Russian incursions.
Along with damaging the Russian economy, the U.S. economy has suffered severe consequences for such actions. For instance, fuel prices in the U.S. have risen to dangerously high levels. This can be attributed to the low supply and high demand of fuel across the country. According to CNN, in early March 2022, gasoline reached prices as high as $4.33 per gallon. In 2018, pre-COVID-19 and the Russian-Ukrainian conflict, gas prices, according to the U.S. Energy Information Administration, averaged around $2.90 per gallon. This statistic illustrates the dramatic increase in gas prices over the past three years.
Moreover, BBC notes that “Russian oil exports could fall by as much as 3 [million] barrels a day.” As blocks in the supply chain increase, fuel prices rise accordingly. While the Russian-Ukrainian conflict is a major source of the issue, post-pandemic inflation has also contributed to the significant increase in fuel prices.
In response to the fuel crisis, the Biden administration condemns fuel companies for high gasoline prices, stating that “no American company should take advantage of a pandemic or Vladimir Putin’s actions to enrich themselves at the expense of American families.”
In urgent efforts to mitigate the blow, President Biden in April tapped strategic oil reserves in the midst of the crisis. Biden’s actions were, in fact, historical. The President himself stated that the oil tapping is “by far the largest release from our national reserve in our history.” He hoped that the increased fuel production would lower gas prices for citizens across the country.
Multiple setbacks have arisen from the seemingly simple solution. On April 6, NBC stated that the petroleum reserve was expected to drop around 40 percent. The number of U.S. oil barrels will continue to decrease in high numbers as reserves are tapped throughout 2022.
The Energy Department notes that the purpose of the reserves is to regulate high oil prices, pointing to similar actions taken in the 1970s, when oil shortages devastated the American populace due to the Arab-Israeli War. The high oil prices affect nearly every US citizen. Americans have yet to determine whether oil reserves will dwindle, and if Biden’s tapping from the reserves will succeed to relieve them of their financial burdens in the long run.
In some sense, the situation is ironic. Biden’s “Build Back Better” plan stresses the importance of disenfranchising fossil fuel companies and turning to renewable energy sources for sustainable production. But at the same time, given the reliance that the US population has on fossil fuels as a power source, Biden must burn even more fossil fuels by the day. Biden does believe that the ultimate, long term solution would be to divert to renewable energy as a source of power.
Despite US sanctions, a large portion of continental Europe still heavily relies on Russian oil. Although Europe recently implemented an embargo on Russian coal, oil bans could be detrimental to national economies across the continent. European countries, including Germany, receive the majority of their oil imports from Russia, and despite notable discourse, this economic factor hinders the European Union from taking tangible action.
By Arjun Shah