Gas Prices and the Russia-Ukraine War

You’ve seen it for over a year now and felt the pinch at every fill up, gas prices have risen incredibly over the last sixteen months in the United States. President Biden and other government officials are blaming it on Russian invading the Ukraine as well as causing inflation in other areas. The mainstream media is parroting the statements without any critical response it appears, but simply dutifully reporting what is being said and nodding in agreement.

Millennial Z and Boomer X talk about exactly when gas prices started rising, the increases over time and how much exactly Russia and the Ukraine contributed to U.S. oil imports before the pandemic created a steep drop in oil usage by U.S. citizens in podcast #25.

It can easily found through searches that gas prices didn’t start rising until the end of January 2021. At the beginning of January 2021, the average retail price of gasoline in the U.S. was $2.25 per gallon. The average price of gasoline reached over $3.00 per gallon on May 17, 2021. In just four months gasoline rose over 75 cents per gallon! In 2021, gasoline prices peaked at $3.41 per gallon which is $1.03 per gallon higher in a year. And gas prices reached over $4.00 per gallon once Russian invaded the Ukraine at the end of February in 2022. That’s right, Russia didn’t invade the Ukraine until 2022, over a year after gas prices began soaring. And once the war began, prices only rose about a quarter a gallon, which would have probably happened anyway.

Why? Well, Russia only has just under 8% of the world’s available oil, and the U.S. imported less than 2% of it’s oil from Russia. As far as the Ukraine goes, the U.S. receives no oil at all from them. So, how exactly could the oil which the U.S. has never received or anticipated to receive impact oil prices? Answer: it doesn’t.

I guess a spurious argument about the oil used by U.S. troops supporting NATO forces driving prices up, but it would be a spurious argument. Those forces aren’t using much more, if any more, fuel than they would if they were conducting training exercises in any other part of the world. They are currently sitting in a neighboring NATO country in the event the war spills over. There were 80,000 U.S. troops in Europe before Russian invaded the Ukraine as the U.S. has bases all over Europe and that’s how many are typically stationed. Currently, there are just over 100,000 troops in Europe due to the Russia-Ukraine war as reported by the Associated Press. That’s an increase of little over 20,000 troops. And those troops aren’t exactly waiting in a warehouse with equipment not consuming fuel unless called upon prior to joining the already existing troops also using fuel as they normally would while there.

The Senate Oversight Committee reported that the four giant oil companies (Exxon, Chevron, Shell and BP) employed an average of 40 lobbyists per year and spent a combined total of $374.7 million on federal lobbying…that’s per year. The API (American Petroleum Industry) employed an average of 48 lobbyists per year and spent $78 million on congressional persuasion. That’s $452.7 million, or almost half a billion dollars, to influence elected congressional positions to vote and make decisions in their interests. It can be safely assumed that it has some impact. Certainly companies wouldn’t spend money to influence people if it didn’t work. Especially almost half a billion dollars in a year.