Ban On Russian Oil In The US Could Add To Price Of Gasoline At The Pump
PITTSBURGH (KDKA) -- West Virginia U.S. Sen. Joe Manchin and other lawmakers are calling for a ban on Russian oil to the United States.
But that could mean higher gasoline prices at the pump. At a press conference late Thursday, Manchin said America must ban Russian oil and other fossil fuels from coming into this country.
"Energy has become a weapon of war for Putin, and he's using it as a weapon of war. He's using it against all of Europe, if you will. Ukraine is basically the catalyst of what he's doing," said Manchin.
Manchin is leading a bipartisan group of lawmakers with a bill to shut down the American market to Russian oil, in particular, which American oil producers still buy, although at low levels, says University of Pittsburgh energy economist Prof. Jeremy Weber.
"Russia doesn't export a tremendous amount of oil to the United States. We import maybe 5 percent or so of what we consume," Weber told KDKA money editor Jon Delano on Friday.
The U.S. consumes about 18 to 20 million barrels of oil each day, and about 600,000 barrels come from Russia.
Manchin says he's talked to major oil producers, who say they are already cutting back from Russia and can get oil elsewhere without hurting American consumers.
"I said I need you to do something else. I need you to make a commitment that the American economy and the citizens of the United States will not be impacted because of corporate profits or shareholder profits or whatever it would be during this period of time of crisis. They all said this is a matter of national unity for us, too," said Manchin.
WATCH: Jon Delano reports
Prof. Weber says domestic oil producers can tap some wells they have already drilled and drill for more oil, but it's not quick or mandatory.
"That doesn't mean a company is able to in one or two days or a week bring all of those uncompleted wells into production. That takes time. And they may not want to do it all at once. What if they expect prices to rise further in the next couple of months?"
Banning Russian oil -- while obviously a strong moral statement on behalf of Ukraine -- may add to the cost at the gas pump, says Weber.
"Refiners will be able to replace those barrels, but they might not be quite the same and they'll have to make some adjustments to deal with it. And those adjustments could imply greater costs that would be passed on to consumers," says Weber.
While a growing group of lawmakers wants to ban Russian oil, so far President Joe Biden has been cool to the idea. Gasoline prices are skyrocketing in this region and across the nation to over $4 a gallon in this state, says AAA.
While Manchin says Putin's attack on Ukraine is criminal and he should not reap war profits from Russian oil, Russia is one of the top three oil producers. So, shutting that oil off could be costly for consumers.
"In Pittsburgh, you guys are sitting at $3.95 a gallon right now, but that is 25 cents more than gasoline cost in Pittsburgh just two days ago," says Lynda Lambert, a spokesperson for AAA.
Some oil companies have already stopped buying Russian oil, which has plunged Russian exports by one-third. That creates a shortage and higher prices.
Weber says although we don't import much Russian oil, American oil producers are not rushing to drill more at home. We have the same number of active oil rigs this week as last week, and U.S. oil production is the same as four weeks ago. That creates a shortage when we need more oil.
"Our supplies of crude oil and gasoline are down, and demand is going up, so that is also complicating prices and causing them to go up even without the Russia Ukraine conflict," says Lambert.
Bottom line. Gasoline is getting more expensive just as Americans are getting out and about with this pandemic easing. If you can find gasoline under $4 a gallon, fill up right now. It's not likely to go back down for some time.
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