Gas and Russia: We’ll feel the pain at the pump

If you need gas in your tank, then today is a good day to top off.

Russia’s Ukraine invasion on Thursday threw global markets into turmoil and the early casualties include natural gas and oil. Prices already were high — GasBuddy.com reported the Illinois average for gasoline stood at $3.723 per gallon, eighth highest in the nation — and the Ukraine situation will not reverse that.

Oil prices on both sides of the Atlantic hovered around $100 per barrel, at one point up 6%, to their highest levels since 2014, The Associated Press reported. Wholesale prices also shot higher for heating oil, wheat and other commodities. The spot price in Europe for natural gas, for which the continent relies on Russia to supply, jumped as much as 31%.

“The US itself is not super-dependent on Russian gas but Europe is and the supply chain is likely to be disrupted,” said Andy Bruno, associate professor of history and environmental studies at Northern Illinois University. “That will likely mean higher prices for oil and gas.”

He added later, “It’s very likely that Russia will react to sanctions by using its leverage over European fossil fuel demand and respond in turn.”

Russia launched a full-scale invasion of Ukraine on Thursday, unleashing airstrikes on cities and military bases and sending in troops and tanks. Ukraine’s government pleaded for help as civilians piled into trains and cars to flee. Military forces battling Russians on multiple fronts suffered dozens of casualties.

In response, President Joe Biden announced new sanctions against Russia, saying Russian President Vladimir Putin “chose this war” and that his country would bear the consequences of his action. Other nations also announced sanctions, or said they would shortly.

Biden unleashed robust new sanctions, ordered the deployment of thousands of additional troops to NATO ally Germany and declared that America would stand up to Putin.

He also acknowledged that the invasion — and efforts to thwart Putin -- will have a cost for Americans. But he sought to reassure that the economic pain that may come with rising energy prices will be short lived in the U.S.

Oil and natural prices have already surged over concerns that Russia — an energy production behemoth — will slow the flow of oil and natural gas to Europe. Biden, however, acknowledged the sanctions are “going to take time” to have their effect on the Russian economy.

How long before the price at the pump rises remains to be seen, Bruno said. While the stock market could, and presently is, reacting negatively to the Ukraine situation, “I don’t envision the spike in oil prices on that quick a time scale, meaning days not hours.”

Steve Witek is a certified financial planner with Witek Wealth Management in La Salle. Historically, he said, the prices of crude oil and natural gas increase more when there’s geopolitical turmoil – but he’s less sure consumers won’t notice changes for a few days.

“I think one of the things we’re seeing in regards to prices is while maybe the price changes could be further down the line, the people who have the power to raise prices will do so immediately,” Witek said.

Motorists in Starved Rock Country weren’t taking any chances. Social media was filled with advisories about which stations raised gas prices, prompting many to head for the local service station to top off.

At the East Side Shell in La Salle, manager Laurie Loger said business Thursday was more brisk than usual, and the Ukraine invasion was a popular topic at the cashier’s station, too.

“People are starting to ask questions,” Loger said. “Nobody knows what’s going to happen.”

The Associated Press contributed.