Although the conflict between Russia and Ukraine seems far in the distance, it could actually affect the economy of people living in the United States. And it is that gasoline prices, for example, which have already reached their highest price in eight years, could increase even more if hostilities continue.
The economic impact could also go beyond gasoline, as sanctions or export controls against Russia could further worsen the current shortage of semiconductors, while restrictions on wheat or metals could cause inflation to rise further.
It should be remembered that Russia is a major exporter of crude oil and represents about 12% of world supply. Therefore, any interruption of those exports is likely to drive up prices for consumers, as reported on CBS.
“If Russia attacks Ukraine, we could see oil prices above $100 dollars a barrel next week,” said Patrick DeHaan, head of oil analysis for GasBuddy, an app that tracks fuel prices.
DeHaan added that average US gasoline prices are likely to rise. reach $4 dollars a gallon in the coming weeks or months.
A key factor in terms of the strength of the impact that the conflict could have on the economy will be the way in which Russia responds to the sanctions applied by the United States.
And it is that Russia could retaliate against these sanctions by stopping oil exports and natural gas, DeHaan said. That would put pressure on gasoline and natural gas prices in the United States, which have already soared this year.
Although oil is Russia’s most important export, it is also a a large agricultural supplier and ships wheat, rye, barley and other grains to Central Asia and the Middle East. Disruptions in these staples could push up global food prices, hitting US consumers as well.
Russia also produces just under half of the world’s palladium, as well as platinum and nickel , key products in the production of complex microchips that are used in all kinds of technologies, from electric meters to sophisticated BMW cars.
Russia is also an important aluminum producer.
The increase in the price of these metals could in turn increase even plus the prices of automobiles, electronics and other items that use these materials.
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