One month after Russia invaded Ukraine, Americans paid 20% more on average for regular unleaded gasoline. But the war in Ukraine is not the only thing affecting energy prices. Inflation has been increasing for months, and supply chain issues still affect the economy. With that larger view, how much of the increase in oil and gas prices can be attributed to the conflict between Russia and Ukraine?
What causes gas prices to rise or fall?
Crude oil costs are the biggest factor in gasoline prices. When crude oil prices increase, gasoline prices increase, as well. The price of a barrel of crude oil depends primarily on supply in the market. When major oil producers create more supply, the cost of crude tends to drop. When there are disruptions to oil supply or infrastructure, such as the Russian invasion of Ukraine, crude oil prices can rise, taking gas prices with them.
