Treasury Secretary Warns of Another Spike in Gas Prices This Winter

Gas prices may spike again this winter, Treasury Secretary Janet Yellen warned on Sunday, explaining the rise with the fact that on top of halting most of its Russian oil purchases this winter, the European Union is banning the provision of services that allow Russia to ship oil by tanker.

The secretary’s comments could help fuel fears that gas prices will spike again after they began sinking last month pushed by recession fears.

According to transportation organization AAA, gas prices in the US have fallen to an average of $3.71 after soaring to a national average of $5 per gallon earlier this year.

Yellen’s comments have increased the fears that Americans’ wallets could be strained by a spike in prices similar to the one seen this summer after the temporary relief created by the decrease in gas prices.

The steady decline in prices that provided relief to inflation-weary consumers and an economy mired in a slowdown was driven by multiple factors, including the fact that when gas prices spiked above $5 a gallon, some Americans cut back on driving.

Yellen pointed out to the western price cap proposal as a measure designed to both maintain some access to Russian oil supplies to hold down global oil prices lower while curbing revenues that Moscow uses to support the Russian economy and fight the illegal war in Ukraine.

In a move designed to restrict Russian oil sales above a certain price G7 nations – the US, Canada, France, Germany, Italy, Japan, and the UK- agreed to a price cap on Russian oil earlier this month though they did not say exactly what the cap would be yet.

The measure envisions countries countering any Russian move to sell to friendlier nations – such as China or India – with higher service costs and competition by selling less expensive products.

The rise in global oil prices could be further exacerbated by Moscow’s threats not to sell to countries that participate in the oil cap on top of effectively shutting down a major gas pipeline to European nations, which could additionally shake up the world’s energy sector.

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