A8
REGIONAL
Wallowa County Chieftain
Wednesday, March 16, 2022
Gas prices soar as Russian invasion in Ukraine continues
tor of government and pub-
lic aff airs at AAA Oregon/
Idaho. “Only about 8% of
our imported oil last year
came from Russia, but
Europe gets a lot of oil from
Russia, roughly 25%, so any
time you take a big chunk
of supplies away, it sends
prices higher. It’s basically
supply and demand, as we
learned back in Economics
101. When you have a major
global producer of oil, Rus-
sia, and its product is taken
off the global markets, all of
the sudden you have to look
around and fi gure out where
that oil is going to come
from.”
By ALEX WITTWER
EO Media Group
LA GRANDE — Gas
prices are soaring to record
highs amidst the Russian
invasion of Ukraine, sparked
by fears that NATO coun-
tries may begin enacting
additional sanctions against
Russian crude oil.
In the United States, Pres-
ident Joe Biden announced a
ban on Russian oil on March
8.
Crude oil prices briefl y
skyrocketed to more than
$130 on March 8, the high-
est it’s been since 2008,
and nearly doubling since
December.
Oregon has seen gas
prices rise to more than
$4.50 a gallon, while some
areas of Portland have sold
gas as high as $6. Diesel
prices have risen above $5 a
gallon.
“I just came from Ari-
zona, I’m on my way home
to Washington, and this is the
Alex Wittwer/EO Media Group
A personal vehicle fi lls up at the Chevron gas station, Island City, on Thursday, March 10, 2022.
Gas and diesel prices have risen to record highs following the Russian invasion of Ukraine.
highest price I’ve seen for
diesel,” said Diane Miller, a
competitive barrel racer who
was traveling home to Moses
Lake, Washington, after a
three-week trip to Arizona.
Miller paid more than
$140 to fi ll up half a tank of
diesel at the Chevron station
in Island City on Thursday,
March 10. She said that she’s
lucky to be able to aff ord the
increased costs at the pump,
but knew several people who
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would not be able to aff ord
the increased gas and diesel
prices. Miller said she will
have to pay for more expen-
sive diesel prices all sum-
mer as she competes in bar-
rel racing competitions.
“It’s defi nitely hard on
America,” Miller said. “It’s a
bad deal, and I don’t think it
would be this way if Trump
would have stayed in.”
According to the U.S.
Energy Information Agency,
the geopolitical risk related
to Russia’s invasion of
Ukraine has contributed to
higher and more volatile
crude oil prices. But Rus-
sia’s oil footprint on the U.S.
market is minimal; only 8%
of the U.S. demand for oil is
fi lled by Russian suppliers,
or approximately 600,000-
800,000 barrels per day,
according to J.P. Morgan. In
comparison, the U.S. pro-
duces nearly 12 million bar-
rels per day domestically,
according to the Ameri-
can Fuel and Petrochemical
Manufacturers trade associ-
ation. Still, the U.S. is a net
importer of oil.
It has left many at the
pump
wondering
why
exactly gas prices have risen
so dramatically.
“The U.S. does not get
a lot of oil from Russia,”
said Marie Dodds, direc-
Two records, two years
At the beginning of the
COVID-19 pandemic, oil
prices fell to their low-
est price in history, reach-
ing negative values in April
2020. That spurred produc-
ers to cut output as oil tank-
ers sat outside ports, unable
to offl oad their oil shipments.
In the U.S., thousands of oil
workers were laid off , and
the number of active drilling
rigs plummeted from 700
in January 2020, to approx-
imately 200 rigs according
to previous reporting by the
New York Times.
That number has slowly
been returning. Dodds said
the loss of production cou-
pled with the increase of
demand to increase prices as
businesses relax COVID-19
related restrictions and states
tease at a full re-openings.
Prices for gas in spring 2020
had fallen drastically, with
gas prices falling below $2
nationally for the fi rst time in
decades.
“In the spring of 2020
it was incredible; we saw
demand for oil and gas fall
to dramatically low levels
that we hadn’t seen since the
1960s,” Dodds said. “And
now here we are, two years
later, and people are return-
ing to their normal routines,
going back to work, going
back to school. We are con-
suming more gas around
the globe, but the produc-
tion is not back where it was
pre-pandemic. Production
hasn’t kept up, so that’s the
main driver.”
As prices increase, man-
ufacturing businesses are
faced with the tough choice
of having to increase prices
to off set transportation costs.
Patrick Raimondo, plant
manager for Behlen Country,
Baker City, said the company
is waiting for a few weeks to
decide how they want to han-
dle the cost increases. For
now, he said the company
has not raised prices in light
of the gas price increase.
“As of right now we’re
holding off on doing any sur-
charges for our customers,”
Raimondo said. “As these
prices increase, it is going to
aff ect us down the road, just
from the additional costs.
We’re just trying to see how
it goes over the next couple
of weeks and having conver-
sations and open communi-
cations with our customers
just to make sure we’re all
on the same page.“
The U.S. has continued to
bring oil rigs back online. By
January 2021, 374 rotary rigs
were operating in the United
States, according to the EIA.
By December 31, 2021, in
response to rising prices, the
number of rigs operating in
the United States rose to 586
rigs.
Ongoing
sanctions
against Russia have locked
the country out of foreign
banks, goods and has caused
the Russian ruble to plum-
met to nearly half its value
at the beginning of February
2022.
According to the J.P.
Morgan, almost 70% of Rus-
sian oil is struggling to fi nd
buyers even as Russian oil
is being off ered at a record
$20-per-barrel discount to
international
benchmark,
with no bids.
“What happens half-
way around the world can
also have an impact on
oil prices,” Dodds said.
“There’s much more at play
here than just what’s hap-
pening in the U.S.”
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