Why are KC gas prices up if the U.S. doesn’t depend on oil from Russia? Here’s the deal

The conflict between Russia and Ukraine is a leading factor driving gas prices up to a record high, even if the U.S. doesn’t even get most of its gas from Russia.

As of Tuesday, the national average for a gallon of gas was $4.17, beating out the previous record set in July 2008 of $4.10.

On Tuesday, President Joe Biden ordered a ban on Russian imports, in an attempt to penalize Russia for invading Ukraine, the Associated Press reported. U.S. allies like the European Union will also attempt to threaten Russia with similar penalties, according to the report.

States like Missouri and Kansas have some of the lowest gas prices in the nation, but both states have seen prices at the pump climb fast since Russia’s invasion.

In Missouri, prices have risen nearly 40 cents per gallon since the first of the month and Kansas prices have risen by 35 cents per gallon since Mar. 1, according to AAA.

To help break down how the crude oil market works and how the war in Ukraine will directly impact American gas prices, AAA Missouri spokesperson Nick Chabarria has some answers.

Is there actually a shortage of gas?

Chabarria said there hasn’t necessarily been a disruption to oil or gas supply yet, so no, there’s not exactly a shortage.

The main driver of the increase in gas prices is the rising price of crude oil, he said, and that is in large part because of Russia’s war in Ukraine—and the sanctions that have followed.

The price of crude oil has increased about $30 a barrel since Russia first invaded Ukraine. Crude oil accounts for about 50 to 60% of what drivers pay for when they fill their tank. So when crude oil goes up, gas prices will follow.

If we don’t get most of our gas from Russia, why are prices still going up?

The price of crude oil is determined globally, not just by the U.S. or U.S. producers.

Although America is a major oil producer and isn’t reliant on Russian imports, these kinds of sanctions can cause the global oil market to go into a tailspin.

That’s largely because of uncertainty around the conflict and what it could mean for the market, Chabarria said.

Russia is the third largest producer of crude oil globally, and depending on how the conflict unfolds, all that oil could possibly be pulled from the market.

Oil producers and gas producers buy oil based on where they think the markets are going to go, so even if there hasn’t been a disruption to supply yet, a lot of guessing and prediction factors in.

To account for the risk of losing some of the world’s gas supply, prices are up.

States in middle America like Missouri and Kansas are seeing some of the cheapest prices in the country right now. Why is that?

One factor is fuel tax, Chabarria said.

Missouri currently has the sixth lowest fuel tax rate in the country out of the 50 states plus D.C. Kansas has the 18th lowest fuel tax rate.

Another factor Chabarria said is important is the ease of supply. There are pipelines that run through Kansas and Missouri, and oil and gas terminals near some of the metro areas. That makes it easier—and cheaper—to get gas here.

What can we expect to see in the coming weeks or months?

Chabarria’s main message for the average driver is: if you need gas, don’t wait thinking prices are going to come down. Prices are likely to increase.

Do you have more questions? Ask us at kcq@kcstar.com.

This story was originally published March 9, 2022 at 5:00 AM.