Could gas prices affect the U.S. economy?: How the Ukrainian invasion will impact local economies

WILMINGTON, NC (WWAY) — The stock market has waffled up and down in the wake of Russia’s invasion of Ukraine. But to get a better idea of how this conflict could affect us locally, we’ll need to take a closer look at fuel and oil.

The United States doesn’t rely on Ukraine of Russia fuel as much as most of the European nations. Still, financial experts like Brendan Viehman are keeping a close eye on sanctions, especially fuel.

“My big concern for the stock market was the energy sector,” Viehman said.” Russia produces most of Europe’s energy, a large amount of it. And we even get stuff from them.”

Before fuel sanctions, the U.S. bought about 10% of Russia oil. Energy products are one of Russia’s biggest exports, they are accounted for 62% of its total exports last year. The U.S. isn’t one of Russia’s biggest buyers, but sanctions and boycotts are driving up energy prices and cost at the pump.

“Gas prices have a real outsized impact on our brain, because you see that price every single day,” said Mike Giordano, with Williams Wealth Management. “And so, if we see the price going up, you start seeing people not being sure about how much they should spend.”

Tightening the budget for many, like Sydney Roberts, who invests in stocks on the side. It could potentially cause further inflation.

“You drive around and you fill up your tank, and it’s shot up like 15 cents? Which is not nothing,” she said over the phone. “So I definitely feel that on my paycheck. Like of course it’s going to ripple back and affect things like the economy.”

But if oil prices continue to rise, it won’t just affect gas prices.

“Because lumber prices went up, it was more expensive to build houses,” Viehman explained. “And anything that involved lumber and wood was then being more expensive afterwards. And it’s the same sort of thing with the gas prices going up.”

While our economic fallout won’t be nearly as drastic as Russia’s, it could affect travel and purchasing, raising airline prices and the cost of manufacturing.

“If oil prices continue staying high, the manufacturing of goods cost more money. And so people start saying, you know what, I’m not going to buy as much as I thought I was going to buy because it’s costing a lot more for each particular item. And this is how you slow down the economy,” Giordana said.