CLEVELAND — As the conflict between Russia and Ukraine continues to heat up, consumers will be feeling the impact at the gas pump.
The conflict is expected to impact the energy industry, raising prices on oil and natural gas. Russia is an important supplier of oil worldwide, according to Michael Goldberg, associate professor at the Weatherhead School of Management and Executive Director of the Veale Institute for Entrepreneurship at Case Western Reserve University.
"The demand for oil is outpacing supply, so it causes our energy prices to rise," Goldberg told 3News. "Our European allies are extremely dependent on resources out of Russia, and Ukraine is a key energy distribution hub as well. The markets look at all the uncertainty over what's going to happen as tensions continue to escalate and that is causing prices to rise."
Goldberg says the resource is one that many countries including the United States are dependent on. For example, Germany gets about 2/3 of its natural gas from Russia.
"The truth is is that the U.S., Europe, and many other markets around the world are still highly reliant on fossil fuels," Goldberg explained, "and Russia's one of the largest suppliers of fossil fuels in the world."
On Tuesday, U.S. President Joe Biden confirmed a pipeline meant to carry natural gas between Russia and Germany is being paused. In his own news conference, German Chancellor Olaf Scholz said the measure was necessary to "send a clear sign to Moscow that such actions won't remain without consequences."
However, Rt. U.S. Army Officer Steven Oluic does not believe sanctions will have an impact on Russia's actions, and noted Russia's ability to turn to other countries and markets if Western Europe clamps down.
"Russia is quite well-placed and have been preparing for a while for this action, I believe," Oluic said. "When you look at their close relationship with China, they have markets for all their goods. If Western Europe doesn't want the natural gas and oil -- which predictably will be minimized -- that export, it will go to China or other markets.
"Remember, oil, gas, strategic minerals -- they're world commodities, so they go to the highest bidder, which will impact the U.S., I think, most significantly."
If Russia did decide to stop exporting oil and natural gas to Western Europe, Oluic says that would be "catastrophe" to Western Europe, who he said would not be able to replace that natural gas.
In addition to the impact at the pump, both Goldberg and Oluic also acknowledged the impact on the economy and markets as a whole, increased supply chain issues, and the impact on the Eastern European and Ukrainian communities here in Northeast Ohio. In an article on GasBuddy, the website's Head of Petroleum Analysis Patrick De Haan warned this conflict, in combination with annual factors such as a springtime surge in gas prices and seasonal maintenance at refineries, will have an impact on consumers.
"The weeks ahead could be rather ugly with rising prices," De Haan wrote, "especially if Russia pursues a strong-arm invasion of Ukraine."