As the Ukraine crisis intensifies, oil prices rise

In Los Angeles, gas cost more than $5 a gallon last week. In the rest of the country, gas is a relative bargain at just over $4 a gallon.

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 Oil prices rose to 14 years, while petrol prices exceeded $ 4 a liter close to the world record, according to the U.S. and its partners discuss possible restrictions on oil purchases in Russia after the country invaded Ukraine.

Russian oil has so far not escaped Western sanctions, at least directly, to stem the recession in the US and Europe.

But the prospect of such a change has briefly sent Brent crude oil prices, a global average, over $ 130 a barrel, the highest price since 2008. Brent traded for about $ 124 a barrel in the morning trade.

"We are now talking to our European counterparts and our partners to look at a systematic approach in the hope of preventing the importation of Russian oil," Secretary of State Antony Blinken told CNN on Sunday. "That's a very active conversation as we speak."

Oil prices are rising as fears about Russia's supply of goods grow

Rising energy prices come as consumers in the U.S. face the worst inflation in decades. Petrol prices were already rising sharply before the Russian invasion of Ukraine, as demand re-emerged in the decline at the beginning of the epidemic and goods were delayed.

But inflation has skyrocketed since Russia invaded Ukraine late last month.

Petrol prices fell by 45 cents a liter last week, reaching the national average of $ 4.06, according to AAA. That is within the peak of 2008. (Prepared for inflation, the 2008 record will be worth $ 5.37 today.)

The diesel fuel prices are very good, reaching the national average of $ 4.61 per liter.

"I saw diesel last week cost $ 4.79 and it was definitely a sticker shock," said Monte Wiederhold, an independent truck driver based in Lebanon, Ohio. He usually buys 170 to 200 liters at a time and said he would have to raise the $ 750 limit on his fuel card.

Wiederhold has a fuel gauge built into his truck rating, which is updated weekly. But with prices rising more than 60 cents a liter last week, it is difficult to keep up.

"We're squeezing him," he said. "If you fix it and it takes a big jump, you run that week where you don't recover."

Oil prices can gain even more

How much energy prices can go up depends on what kind of sanctions it takes and what additional resources are available to replace any lost exports from Russia.

The US may simply refuse to buy oil from Russia, but if other countries continue to buy it, it will have little effect on global supply and rising pressure on prices will be limited.

U.S. Secretary of State Antony Blinken said on Sunday that the U.S. and European allies are in talks over potential restrictions on Russian oil exports.

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However, if the U.S. with its allies conducts a concert to limit Russian exports, world prices could rise sharply. Russia currently supplies about 7 percent of the world's oil and other oil products, exporting 7 million barrels each day.

If that offer were significantly reduced, analysts predict that crude oil prices could rise to $ 180 or $ 200 per barrel. At the end of that list, petrol prices are expected to reach $ 5.84 per liter.

Finding other sources of oil

Biden officials are eager to find a replacement for Russian oil. Managers have been urging Saudi Arabia and other OPEC members to increase production.

U.S. officials have reportedly opened talks with Venezuela over reducing the country's oil exports. If the ongoing talks aimed at reviving Iran's nuclear deal are successful, that could boost global oil power.

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Rising prices may also increase domestic oil production. Federal forecasters expect US oil companies to produce 12 million barrels per day this year, up from 11.2 million barrels per day by 2021.

The Ukrainian war has also contributed to rising grain prices, as Ukraine and Russia are major suppliers of both wheat and wheat. That may add to the increase in supermarket prices. Rising grain prices are a major concern in developing countries, where people are increasingly dependent on imported food.