Ukraine-Russia crisis could push inflation to 10% if conflict escalates.
Sanctions will not deter Putin. Tanks have already moved into Ukraine.
This is not the time to criticize the President. I’m no fan of his presidency, but in this situation to avoid all-out war that will draw in China, Iran, Australia, England, and Germany, in is not worth it. Lets see if sanctions will sting Putin. I doubt they will. Germany has shown to have a back bone suddenly. Germany has taken steps to halt the process of certifying the Nord Stream 2 gas pipeline from Russia. – Trenton White USA
Russian President Vladimir Putin has reportedly ordered troops to Ukraine’s separatist regions. Fox News’ Steve Harrigan with more from Kyiv, Ukraine.
U.S. inflation is already at the highest level in four decades. The worsening Ukraine-Russia crisis could push it even higher.
That’s because the conflict is threatening to send oil prices above $100 a barrel for the first time since 2014, according to RSM chief economist Joe Brusuelas. Oil prices already surged to a fresh eight-year high on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, with Brent crude, the global benchmark, hitting $97.63.
A war in Europe – which many foreign policy experts say is a real possibility – could cause oil prices to climb as much as 20% to $120 a barrel, Brusuelas estimated. Should that happen, consumer prices in the U.S. would surge above 10% on an annual basis, the economist said, the highest since October 1981.
“The potential for a broader energy shock to the global and U.S. economies should Russia invade Ukraine has added to a combustible mix of factors that is causing inflation to accelerate in the United States and abroad,” Brusuelas said. “That risk carries with it the potential to slow down growth.”
Russia is the world’s second-largest producer of both oil and natural gas; a conflict or sanctions could disrupt the oil market even further at a time when high demand is outpacing tight supplies. The Organization of the Petroleum Exporting Countries and other oil-producing nations, together known as OPEC+, have resisted calls to boost supply.
Germany already halted the certification of the Nord Stream 2 gas pipeline from Russia, while the U.S. and the European Union have floated potential sanctions against Moscow amid reports of continued shelling in east Ukraine. President Biden pledged the U.S. and its allies will respond “decisively and impose swift and severe costs on Russia” in the event of an invasion, although it’s unclear what they may look like.
American and European officials fear that Russia may retaliate against the sanctions by cutting off the supply of oil and natural gas that flows from Moscow to Europe, sending prices spiraling higher.
JPMorgan Chase economists have warned that any disruption to Russia’s supplies could “easily” send oil to $120 a barrel.
U.S. consumers are already facing sticker shock at the pump: A gallon of gas, on average, cost $3.51 nationwide on Tuesday, according to AAA – up from $2.63 a year ago. In California, gas prices are well over $4 per gallon.
For months, the prices of all kinds of energy – gasoline, diesel fuel, natural gas, oil and more – have been a major driver behind inflation, which surged 7.5% in January, the highest level since 1982. Energy costs have climbed 27% over the past year, in part due to lopsided supply and demand. Consumers are traveling more, but the supply side has not kept up with the demand.
The European crisis escalated this week after Russian President Vladimir Putin approved legislation that would allow the deployment of troops to two separatist regions in Ukraine. Russia has amassed an estimated 150,000 troops on three sides of Ukraine, and Biden has repeatedly warned that Putin has decided to invade the country.
SEE ALSO : Ukraine threat High gas prices proffer Biden political risk
Biden and Putin have tentatively agreed to hold a bilateral summit after French President Emmanuel Macron brokered a deal in a last-ditch effort to avoid war.
Credit : Applenews
Ukraine-Russia crisis could push inflation to 10% if conflict escalates