By Camille Cox | Staff Writer
As of Monday, the average gas price per gallon in the U.S. reached a record-breaking high of $4.43.
While Russia continues to attack Ukraine, the world economy has begun to feel the impacts, as the global price of oil increased in the last few weeks. Dr. Steve Gardner, professor of economics and director of international business, said that even though the U.S. gets a small amount of oil from Russia, oil is on a global market, which has global impacts.
“The important thing to understand is the price of oil is not just determined by supply and demand in the United States,” Gardner said. “The price of oil is set globally.”
Gardner said the rise in gas prices began before Russia invaded Ukraine, but the war is one factor among others, such as COVID-19, that has led to an increase nationwide.
China has closed several cities, including the manufacturing hub of Shenzhen, due to an influx of COVID-19 cases. Gardner said this has slowed down production and shipping worldwide.
“In particular, [COVID-19] has broken in Shenzhen, the most important port city in the world, and so oil prices today are actually down about 8% because of China,” Gardner said. “The economic situation in the world is very noisy and complicated. The war itself and the sanctions from the U.S. and Europe against Russia, the situation in China, and the fact that we were already coming out of COVID-19, and the Federal Reserve was in the process of starting to raise interest rates because of rising inflation in the United States — all of those things are affecting the U.S. economy.”
Gardner said that while there has been speculation about what will happen if China decides to back and supply aid to Russia, Russia relies on China much more than China relies on Russia, meaning they have an imbalanced relationship.
“China has its own problems with this outbreak of COVID-19,” Gardner said. “It’s not really in China’s interest for Russia to be a terribly strong country.”
“We are not that dependent on Russian oil to begin with, whereas the Europeans are — they get around 40% of their natural gas and 35% of their oil from Russia,” Gardner said. “We all pray and hope that the war will end as soon as possible, but the question will be, does anybody want to be as dependent on Russia for energy as they have been in the past?”
San Diego sophomore Jenna Stehly said the increase of gas prices particularly hurts college students.
“It’s really tough on college students because we have to worry about basic needs like getting groceries, but with gas prices, it’s hard,” Stehly said. “Especially going on spring break and traveling, it’s expensive. It’s almost $6 a gallon back home, and it’s hard because my family lives in the middle of nowhere and is almost 10 miles from anything, so they drive a lot.”
While the lasting economic impacts will not be visible right away, Gardner said that he expects the U.S. to feel little to no impact and that Europe will suffer the most.
“The biggest victim of this war is Ukraine, but maybe in the long run, the biggest victim of this war will be Russia itself,” Gardner said.
