As Biden’s sanctions on Russian oil tighten, DeKalb County drivers pay more at the pump

DeKALB - The price Illinoisans pay at the pump for gas right now is likely only going to increase still, amid a federal announcement Tuesday that the U.S. will halt oil imports from Russia in retaliation for its invasion of Ukraine.

Like many, Sycamore residents Jen Jaeger, 37, said she’s doing what she can to balance the rising prices and other budgetary needs. She filled up her tank at the Hy-Vee gas station, 2720 DeKalb Ave. Tuesday, where regular gas was $4.59 per gallon and premium and diesel more than $5.

“I am stuck in the middle of budget and safety,” Jaeger said. While COVID-19 cases continue to decline across the region, the stay-at-home mom said she chooses to drive her children to school every day to mitigate their virus risk.

On Tuesday gas prices averaged $4.17 per gallon nationwide and $4.50 per gallon in Illinois, which ranks seventh highest in the country, according to the American Automobile Association. Those prices reflect an increase of 55.7 cents per gallon hike from last week and 80.5 cents from last month.

Rising gasoline prices are a direct result of higher oil prices due to supply chain disruptions caused by global market changes. As of Tuesday the barrel price of oil was $128, compared to $61 one year ago, a gallon of regular gasoline could soon reach $5, according to the American Automobile Association.

Oil prices are rising worldwide due to the conflict in Eastern Europe. Russia is the world’s second largest oil exporter behind only Saudi Arabia and several nations have imposed sanctions on the country amid the war. Russia’s oil exports are now under what amounts to a ban, as shippers are refusing Russian oil, countries are turning away Russian tankers and banks are refusing to extend credit to Russia.

President Joe Biden announced Tuesday the U.S. will ban all Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, but he acknowledged it will bring higher costs to Americans, particularly at the gas pump. Unlike the U.S., which is the world’s largest producer of crude oil, Europe relies on imports for 90% of its gas and 97% of its oil products. Russia supplies 40% of Europe’s gas and a quarter of its oil. The U.S. does not import Russian natural gas.

What does that mean for gas prices in Illinois?

The average price of gas in DeKalb County was $4.37 per regular gallon as of 4 p.m. Tuesday, according to GasBuddy, though many gas station prices in the Sycamore and DeKalb area reached $4.59. Among neighboring counties, the average price of gas in Will County was $4.50, followed by $4.38 in Lake, $4.41 in McHenry, $4.45 in Kane, $4.49 in DuPage, $4.26 in Lee, $4.43 in LaSalle and $4.50 in Kendall counties.

In 2019, the city of DeKalb passed a 4-cent local gas tax increase, part of a plan to generate additional revenue streams to offset city budget constraints. DeKalb City Manager Bill Nicklas said this week the DeKalb City Council hasn’t discussed any temporary halt to that increase to balance rising prices.

“We haven’t discussed it with the council at this point,” Nicklas said. “It [prices] is raising as we speak, it is not like we are blind to what is happening around us.”

In 2021, the U.S. imported roughly 245 million barrels of crude oil and petroleum products from Russia – a one-year increase of 24%, according to the U.S. Energy Information Administration. Shutting down a significant chunk of the country’s oil supply is bound to raise prices, Carl Campbell said, an economics professor at Northern Illinois University.

“There’s going to be less supply, and that drives up price substantially,” Campbell said. “We also produce a lot of our own oil, and we get a lot from Saudi Arabia and the Middle East.”

When global markets are disrupted and supply decreased, gas station owners typically pass that price change onto the consumer.

A drastic increase in prices at the pump has happened twice before amid world conflict, Campbell said. In 1973, during the Arab-Israeli war, the U.S. sided with Israel and other oil producing companies in the Middle East halted supplies to the U.S. In 1979, the Iranian Revolution led to less oil production.

“As a result, gasoline [prices] rose dramatically in a short period of time, and that led to both high inflation and to a recession in the U.S.,” Campbell said.

Inflation is at a 40-year high. Over the weekend, the national average of gasoline rose above $4 per gallon, the highest since 2008.

Campbell said he wouldn’t be surprised if inflation, already at 7.5%, rose above 10%.

“I think we’ll definitely see [inflation] go higher, because gas prices are rising and oil is a factor of production for so many industries like heating,” Campbell said.

It’s hard to predict how quickly prices will rise after Biden’s announcement on Tuesday, Campbell said, or how long they’ll stay that way.

“It really depends on what happens over in Ukraine,” Campbell said. “If Ukraine and Russia were to reach some kind of negotiated settlement within the next week, I think oil and gas prices would come down right away. I think it if gets drawn out it’ll remain high for a long time.”

For some, as Biden’s remarks suggested, that’s a necessary price to pay.

“It hurts our economy, but I personally think it’s worth it in order to support Ukraine, even though it makes us worse off,” Campbell said. “I think obviously the invasion is wrong and Ukrainian people have shown tremendous courage and resolve, and we want to do whatever we can to support them.”

• The Associated Press contributed to this story.