Arizona has some of the highest gas prices in the country as crude oil prices touch the ceiling.
As already notable increases in gas prices are seen across the country due to an array of reasons, now there is a global energy market disruption. The worsening conflict between Ukraine and Russia is causing barrel prices to rise. The recent jump in the price of crude oil to over $110 per barrel will be felt in every state, from farmers to gas payers.
"The current realistic scenario is that a large portion of Russian crude oil, as well as refined oil products, will no longer be palpable to the market and create a supply deficit for the duration of the armed conflict," Louise Dickson, senior oil analyst at the intelligence firm Rystad Energy, said earlier this week in a news release issued by qz.com.
After a flood of divestment from Russian oil assets by major Western companies, oil prices surpassed $110 per barrel on Wednesday, a news release by Reuters said.
"Demand destruction—through still higher prices—is now likely the only sufficient rebalancing mechanism," a Goldman Sachs analyst said in the Reuters release.
On Monday, Shell announced it will cut ties with the Russian state-owned energy giant Gazprom. ExxonMobil announced on Tuesday that they would be disinvesting from a Russian energy project and would cease investing in Russia.
The average cost of oil for January 2022 was $83.92 per barrel, a recent report on ycharts.com said.
Arizona is paying some of the highest gas prices in the country, with an average price for a gallon of gas at $3.98, the American Automobile Association's national gas price average report said Thursday. The national average is $3.84 per gallon. That number stands to continue to climb.
Farmers in particular face a big challenge with the turmoil between Russia and Ukraine, Chris Mize of Arthur Farms told ABC12 News this week.
"Twelve months ago, when growers were putting down crops last year, they would've priced around $200 a ton; this year prices are around $600 a ton," Mize said in the ABC12 report, attributing the cause to be Ukraine's closure of a port that supplied many farmers with nitrate (nitrogen).
"Natural gas is the most important thing to make nitrogen fertilizer and so we need a lot of energy to produce nitrogen fertilizer, and this is the reason that international price of fertilizer is highly connected to the prices of natural gas," Dr. Luke Gatiboni, a soil fertility specialist, told ABC12 News this week.