As the likelihood of Russia’s invasion of Ukraine increases, a threat is mounting up that will surge global energy prices significantly.
This will directly impact oil and gas prices in America ahead of the 2022 midterm elections, giving a significant blow to Democrats’ domestic policies.
Russia will stop oil supply to many countries if America imposes sanctions
Philip Rossetti, a senior fellow at a think tank named R Street Institute, noted the Russian invasion of Ukraine could not be good for global energy prices.
According to Rossetti, Europe is highly dependent on Russia in the energy sector; this is where Russia has the upper hand during all of this conflict.
As many European countries are members of NATO and align themselves with the United States, Russia is eyeing to choke these countries economically by disturbing their oil supplies.
Thus, Rossetti stated state-owned Russian enterprises, which are controlling European oil and have political interests in Russia, would play a major role should any war break out.
Should Russia invade and Western countries make good on their threats of strict sanctions, already rising oil prices, currently $95 a barrel, could hit $125, one analyst says. https://t.co/V2w5WGfYxn
— NBC News (@NBCNews) February 15, 2022
He further said it is not easy for European countries to move away from Russian facilities. Russia knows this very well, which is encouraging them to develop a strategy against the west.
The key factor here is what type of sanctions the Biden administration is planning to place against Russia, Rossetti mentioned.
He established if Europe tries to buy energy from the United States, it would be difficult for them to satisfy its demands. This would ultimately raise prices, as Russia produces a significant chunk of global oil.
According to the New York Times, America is not very dependent on Russian oil, as it only imports three percent of its total needs from Russia.
However, oil prices are set globally, which puts American buyers at the risk of inflation that can go up anytime in the future.
America is not an energy independent country anymore
Meanwhile, Republicans took aim against the Biden administration’s flawed policies that can take oil inflation to new heights.
Senator Bill Cassiday told Fox News the United States was energy independent less than a year ago. Biden’s policies have pushed America towards chaos in the oil market.
Likewise, he asserted Biden’s failed energy diplomacy enabled Russia to blackmail the European Union to ensure it does not stand with the United States in case any conflict happens between Russia and Ukraine.
Energy independence is national security.
America cannot be reliant on the Middle East and Russia for oil.
Unleashing America’s energy is as much about protecting our sovereignty as it is lowering gas prices!
— Riley Moore (@RileyMooreWV) February 14, 2022
Rossetti emphasized the United States can reduce Russia’s influence in the global energy market using well-crafted policies that seem to be absent today.
According to the American Automobile Association (AAA), gasoline prices are currently already 39 percent higher, compared to the same time period of 2020.
If oil inflation breaks out, it is likely to drive up overall inflation in the United States; the trade costs would be higher and consumers will have to face the music.