TAMPA, Fla. (WFLA) – As war enters Europe and the Biden administration announces new sanctions on Russian financial institutions and oligarchs close to President Vladimir Putin, Florida braces for the impact it could have on gas and food prices.
“It’s just a very volatile market right now and then when you introduce a situation like this with Russia and Ukraine, it just adds to the volatility, it adds to the concern in the market which is ultimately driving prices higher,” said Mark Jenkins, a AAA spokesperson.
U.S. crude oil prices rose overnight, ticking close but not exceeding the $100/barrel mark. Worldwide crude oil prices did cross that threshold.
The oil and gas industry has seen a tumultuous few years as the pandemic prevented people from traveling and cut demand.
Companies have been trying to ramp up production again as demand increased.
“We’re already in a crude oil market that’s extremely tight. Supplies are tight and if there’s concern that Russia’s oil might be affected in some shape or form to where that oil leaves the market, then that has a big impact on global supplies,” said Jenkins.
Russia is one of the world’s top oil and natural gas suppliers.
Prices fluctuated throughout the day but trended lower after President Joe Biden announced his new sanctions package, which did not target Russian oil or gas companies, according to Jenkins.
“We’re taking active steps to bring down the cost and American oil and gas companies should not exploit this moment to hike their prices to raise profits,” said President Biden.
The President said the U.S. was ready to release barrels from the Strategic Petroleum Reserve alongside its allies.
“I know this is hard and that Americans are already hurting. I will do everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me but this aggression cannot go unanswered,” said President Biden.
The uncertainty could still lead to price increases at the pump but it is unknown by how much.
Meanwhile, Ukraine is often referred to as the “breadbasket of Europe,” accounting for 12% of the world’s total wheat exports, according to the U.S. Department of Agriculture.
A supply chain expert from the University of South Florida says this conflict could be felt at the dinner table.
“That may impact some of the wheat related products that we are using as far as the grocery shops are concerned,” said Dr. Seckin Ozkul. “If our, basically, wheat supply is reduced, I will expect some price hike but hopefully not so much.”
The U.S. Department of Agriculture Secretary Tom Vilsack says U.S. wheat farmers will boost production and prevent supply chain problems if the invasion chokes off Ukraine’s agriculture economy.
Dr. Ric Rohm, a professor of business and leadership at Southeastern University said consumers may consider any invasion-related price increases to just be more inflation.
“Don’t panic at the grocery store. Don’t panic at the gas pump. You remember the toilet paper shortage during the pandemic. There was plenty of toilet paper around it’s just we all bought it and then it wasn’t in the stores and that kind of accelerated everybody’s fear,” he said.