“Today, I’m announcing the United States is targeting the main artery of Russian’s economy. We’re banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at U.S ports and the American people will deal another powerful blow to Putin’s war machine,” Biden said.
Biden admitted that while the sanctions will issue a blow to Russia’s economy, it will also impact prices in the U.S.
“Defending freedom is going to cost,” he said.
The average price of gasoline in the U.S. hit a record $4.17 per gallon Tuesday, according to AAA, as the country banned Russian oil imports after its invasion of Ukraine.
The national average rose by 10 cents per gallon in one day, and it’s up 55 cents since last week, according to AAA data. The previous high was set 13 years ago when the national average price hit $4.10 per gallon.
But that does not account for inflation. In today’s terms, the record price would be equal to about $5.24 after accounting for inflation.
A line of cars could be seen Tuesday waiting to fill up at the Costco on Collins Road, where gas was still under $4 a gallon. But that’s not the case across Northeast Florida, and prices are only expected to go up.
As of Tuesday, according to AAA, the average price of gas in Florida was $4.15 per gallon, and the average price of gas in Georgia was $4.06.
While price increases are expected, experts told News4JAX that it’s not because the U.S. relies heavily on Russia for gas -- it’s because demand is so high.
“Expect a further jump in the price of oil with this announcement,” Patrick De Haan, Gas Buddy’s head of petroleum analysis, said of Biden’s announcement of the harshest round of sanctions on Russia yet.
De Haan accurately predicted gas prices would break records on Tuesday.
His new prediction: “I think this sanction now on Russian energy will cause prices to go closer to the $4.50 mark.”
The sanctions imposed are not cutting off a major supply of energy resources to the U.S.
Russia only supplies about 8% of energy imports to the U.S., and only about 3% of that is crude oil. On the other hand, Russia supplies 40% of Europe’s gas, and a quarter of it is oil.
“We’re moving forward with this plan understanding that many of our European allies and partners may not be in a position to join us. The United States produces far more oil domestically than all the European countries combined. In fact, we’re a net exporter of energy so we can take this step when others cannot,” Biden said.
Biden said the administration will release more than 120 million barrels of petroleum from reserves. But that’s only enough oil to supply the U.S. for six days.
Some have asked why doesn’t the U.S. just ramp up production of petroleum in the U.S.? Even if companies were to start drilling more now, that extra supply would not be available for months -- if not years.
And these oil companies are profiting from these rising prices after taking a hit in 2020. In 2021, ExxonMobil made $23 billion, Chevron made $15.6 billion, BP made $12.9 billion and Shell made $19.3 billion.
Biden on Tuesday called on these companies to not use Russian President Vladimir “Putin’s war” as an excuse for excess price increases or padding profits.
But regardless, prices are not going to come down until the demand for gas and supply level out -- which is not expected to happen in the coming months.
The Associated Press contributed to this report.