TYLER, TX (EAST TEXAS NEWS) – We spoke Tuesday morning with Dr. Harold Doty, a professor of management at UT Tyler, about the recently announced ban on U.S. imports of Russian oil.
Doty said that when President Joe Biden made the announcement, markets had already reacted.
“And the effects aren’t good,” he said. “It seems the ban on Russian oil will add about 10 to 12 cents per gallon to the price of gasoline.”
Doty noted that the hike had already been baked into gasoline prices by the time most people woke up on Tuesday morning. Considering that the amount of Russian oil used by the U.S. is relatively small, Doty believes the global impact will be muted unless European countries also ban Russian oil.
“I think mainly when you’re talking about the United States alone, it’s somewhat of a symbolic move,” Doty said. “And personally I think it’s a good one. Because of how global oil markets function, it doesn’t have a lot of worldwide effect. But it would if Europe chooses to move forward and take the same action. That would have a major impact on global markets.”
And while the global effects will be relatively small for now, Doty said consumers will definitely feel the pain at the pump. He urges consumers to prepare for gas prices not seen before in the United States and believes the situation will last longer than most people expect.
“The average annual cost of gasoline in 2022 may be the highest we’ve seen in the United States. I expect this issue to ease a bit over the year, but I don’t think it will disappear.”
Texas economist Dr. Ray Perryman agreed with the forecast of even higher gasoline prices and believes the current situation could spur a renewed focus on domestic energy production.
“Another thing we might see is a wake-up call that we need to do more to promote our domestic energy resources,” Perryman said. “And, of course, that could be something that, hopefully, could benefit East Texas, but that won’t happen overnight.”
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