Russian oil ban? US gasoline prices hit highest level since 2008

As gasoline reached $4 a gallon, U.S. and European officials are considering a ban on Russian oil imports. In the past week, regular gas prices rose by almost 41 cents, according to the AAA motor club. 

First Look

The price of regular gasoline broke $4 per gallon on average across the U.S. on Sunday for the first time since 2008.

During the first full week of Russia's invasion of Ukraine, the price of regular gas rose by almost 41 cents, according to the AAA motor club.

That represents the second largest jump in average national prices in a week, GasBuddy reported.

“As Russia’s war on Ukraine continues to evolve and we head into a season where gas prices typically increase, Americans should prepare to pay more for gas than they ever have before," Patrick De Haan, head of petroleum analysis for GasBuddy, said in a statement.

The all-time high for average gasoline prices was set in July 17, 2008 at $4.10 per gallon. 

On Sunday, California had the highest average price per gallon among U.S. states at $5.29, while Missouri had the lowest at around $3.60.

Neither President Joe Biden nor the U.S. Congress has moved yet to ban the import of Russian oil or place energy sanctions on the country, which could have major global economic repercussions.

But a de facto ban is in effect now as about 66% of Russian oil is struggling to find buyers, JPMorgan analysts said this past Thursday.

The U.S. and its allies are starting to consider a ban, Secretary of State Antony Blinken said in an interview on CNN’s “State of the Union” on Sunday.

“We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets,” he said. “That’s a very active discussion as we speak.”

Some members of Congress are also signaling support for a ban on Russian oil, which could push gasoline prices higher. “It makes no sense whatsoever to continue to buy oil from Russia that they use to fund this war and this murderous campaign that they’re undertaking,” Senator Marco Rubio (R) of Florida said Sunday on CNN’s “State of the Union.”  

A Reuters/Ipsos poll conducted in the U.S. on Thursday and Friday, suggests that American outrage is growing over Russia's invasion of Ukraine, which in recent days has increasingly involved Russian bombing of urban areas.

However, some 62% of respondents in the Reuters/Ipsos poll said paying more for fuel and gas because of the crisis was worthwhile to defend another democratic country.

"You see increasing willingness among the American public to pay costs for that support" of Ukraine, said Craig Kafura, a public opinion expert at the Chicago Council on Global Affairs.

British officials say they will look to target Russia's energy sector in future rounds of sanctions, a move the government has so far resisted amid warnings this could push up energy bills, Reuters reports. 

Since Russia's Feb. 24 invasion of Ukraine, Britain has imposed a ban on Russia selling debt in its capital markets and targeted several Russian banks with sanctions, as well as companies like defense firm Rostec and airline Aeroflot.

"We've been very coordinated on sanctions, we've shown huge unity. It's having a big effect in Russia, but we now need to do more," Liz Truss, Britain's foreign minister, said during a visit to Brussels for a meeting of NATO members.

"We particularly need to look at the oil and gas sector, how do we reduce our dependence across Europe on Russian gas, how do we cut off the funding to Vladimir Putin's war machine."

Energy firms have already been indirectly impacted by sanctions on banking and trade, a ban on Russian ships docking in Britain, and a move to prevent Russian companies raising finance in London.

The likes of Gazprom have secondary London listings, and the London Stock Exchange (LSE) this week has suspended trading in Russian securities. 

The United States and EU already have some sanctions in place on Russia's energy and oil refining sectors, but Washington has been cautious on imposing sanctions on Russia's oil and gas flows. 

(Reuters reporters Andrew MacAskill, Alistair Smout and Kylie MacLellan contributed to this report)