Price At The Pump: Tariffs Impacting Oil Prices, U.S. Economy

Oil prices moved slightly lower in the past week, thanks primarily to international news.  As of Tuesday morning, West Texas Crude was trading flat at $63 per barrel, while Brent Crude was also trading flat at $66 a barrel.

Patrick DeHaan with Gasbuddy.com says the oil sector is encouraged by the scheduled Russia/Ukraine talks set for this week in Alaska.  But, on the other end of the spectrum are ongoing tariffs from the Administration, most recently a 50% tariff against India for purchasing Russian oil.  DeHaan noted that move will put a wet blanket on the many economies, including the American economy, since it will make products from India more expensive.

"And that will mean your dollar doesn't go quite as far, meaning you have fewer dollars to spend and that reduces economic activity not just with India, but many other countries now, that are facing higher tariffs like Brazil as well," DeHaan said.  "And all of that simply will cost Americans more.  Of course, no foreign countries are paying the tariffs. It's Americans that pay the tariffs when those items are purchased and imported.”

Diesel Prices Remain High, While Gas Prices Fall

When it comes to fuel prices, DeHaan noted diesel prices remain elevated, thanks to inventories that are running 16% below normal for this time of year.

“So diesel has been continuing to increase in price due to the very tight inventory situation and also due to the situation with Russia and Ukraine," DeHaan said.  "Russia produces a lot of heavy oil and heavy products like diesel. and so diesel prices have been impacted especially by those overseas developments.  Gasoline prices have faded now over the last week for the first time really since mid-July.  We saw the national average falling about three cents a gallon in the last week.  It's still relatively low, the national average for price of gasoline today, just $3.08 a gallon. That is $0.32 lower than where we were a year ago.”

DeHaan added the national average for diesel is holding steady around $3.69 a gallon.

For additional insight how  tariffs are impacting oil prices, as well as the expectation for hurricanes in the coming weeks, listen to our Price at the Pump with DeHaan:

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