Analysts: sanctions on Russia could cause U.S. gas prices to climb higher
The markets are responding after President Biden announced sanctions against Russia. The sanctions, which targets debt and access to western financing, came after the White House called Russia’s advance to Ukraine an invasion.
Analysts are concerned the escalating tensions will impact global grain supplies since Russia and Ukraine account for 30 percent of exports. The U.S. wheat market reacted strongly with front-month contracts closing 47.25 points higher.
However, analysts say that the move will cause gas prices to climb even higher, as Russia became the number two supplier of U.S. oil last year. President Biden says that he is watching energy supplies.
“As we do this, I am going to take robust action to make sure the pain of our sanctions is targeted at the Russian economy, not ours,” the President stated. “We are closely monitoring energy supplies for any disruption. We are executing a plan in coordination with major oil-producing consumers and producers toward a collective investment to secure stability in global energy supplies. This will blunt gas prices.”
The President says that the White House will consider additional sanctions if Russia fails to reverse its action moving into Ukraine.