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Economists fear US recession as gas prices rise

Ban on Russian oil will lead to higher fuel prices, experts say
Posted at 6:50 PM, Mar 08, 2022
and last updated 2022-03-08 19:13:47-05

WEST PALM BEACH, Fla. — As average gas prices in Florida continue to rise, reaching record levels, President Joe Biden announced a ban on Russian oil Tuesday. 

"This is a step we are taking to inflict further pain on [Russian President Vladimir] Putin, but there will be a cost here in the United States," Biden said.

What will that cost be to Florida residents, considering that Russian gas is only imported to Hawaii and the west coast states?  

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"I expect the prices to climb up some more," said University of South Florida professor Dr. Seckin Ozkul, whose expertise is in supply-side management. "We are seeing prices around $4.15 a gallon right now at the pump. I expect that to climb to around $4.50. Hopefully, nothing more than that."  

Dr. Seckin Ozkul, University of South Florida professor
Dr. Seckin Ozkul says he doesn't believe drivers will see any relief at the gas pump any time soon.

Ozkul notes that the Biden administration is looking at ways to get more gas into the U.S. market from other sources.  

"They are playing this balancing act," Ozkul said. "How much do I basically release from the national reserves, so that we actually don't see $5 a gallon."

Other experts predict we will see $5 a gallon because of the volatile world situation, shaking up Wall Street.  

"This is one of the more shocking, scarier situations since, let's just say Sept. 11, when it was unknown how deep it that would get," said stock trader Andy Quinn, who believes Wall Street will bounce back from its current fall induced by spiking gas prices.

Andy Quinn, stock trader
Andy Quinn explains how the current economic climate could lead to a recession in the U.S.

But in the short term, Quinn expects a ripple effect that will weaken the overall economy. 

"When stocks reach a 20 percent loss from their highs, that's considered a bear market. And we are very, very, close and when you come into a bear market, you are pretty much forecasting some sort of slowdown or recession," Quinn said.

Economists said the Russian oil ban is expected to push the price of oil to a record of $150 a barrel or higher.  

For us, that could bring the price at the pump over that dreaded $5 a gallon benchmark, creating a fuel frustration Florida drivers have never seen.