There’s no question that many financially struggling, pandemic-weary Americans are being forced to pay much higher prices for everything from rent and food to used cars and gas.
And that’s exactly what the latest Consumer Price Index (CPI) showed, as it surged by a sizable 7.5 percent in January year-over-year—the fastest rate seen since February 1982.
With U.S. inflation already sitting at the highest level in four decades, could it really get any worse? Unfortunately, the short answer is yes, and that pain could come directly from the worsening Ukraine-Russia crisis.
Rising Oil Prices
The ongoing conflict in Ukraine has already propelled oil prices above $100 a barrel for the first time since 2014, and the price may well go even higher. As RSM chief economist Joe Brusuelas told Fox Business, Russia’s invasion of Ukraine has “potential for a broader energy shock to the global and U.S. economies” adding “to a combustible mix of factors that is causing inflation to accelerate in the United States and abroad.”
“That risk carries with it the potential to slow down growth,” he continued.
Should war spread out across Europe, there’s potential that oil prices could hit $120 a barrel, Brusuelas estimated. If that occurs, he warned that consumer prices in the United States would stampede above 10 percent on an annual basis.
Gas Up $0.22 From Last Month
Even without the Ukraine-Russia tension, gas prices across the country have been trending northward for months. According to AAA, per Fortune, the average price of a gallon of regular unleaded now comes in at $3.53, which is $0.22 higher compared to a month ago. Now, $4 or even $5 gas is a real possibility if oil prices surge past $100 a barrel.
“There’s a lot of variables that go into what we pay at the pump, the price of crude oil being the biggest variable of course,” Daniel Armbruster, a AAA Texas spokesperson, told KBTX in Bryan, Texas.
There are also fears growing that gas prices could reach an unthinkable $6 or $7 per gallon.
“My guess is that you are going to see $5 a gallon at any triple-digit (oil prices) … as soon as you get to $100,” Energy Word founder Dan Dicker recently told Yahoo Finance Live. “And you might get to $6.50 or $7.”
He added that oil prices could eventually reach $150 a barrel, or in line to the “super spike” highs from 2007.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.