Treasury Secretary Janet Yellen offered Sunday a tepid warning that prices at the pump could rise again by year’s end as the European Union stops importing Russian oil.
The cost of a regular gallon of gasoline has steadily fallen in recent months from an all-time high of $5.02 on June 14 to Monday’s average of $3.72, according to AAA.
Ms. Yellen said there’s certainly a risk that prices will spike this winter, which is why the EU is pushing for a price cap on how much countries are willing to pay for Russian oil.
The U.S. has banned imports from Russia, one of the world’s largest producers, because of its war against Ukraine.
“This winter, the European Union will cease, for the most part, buying Russian oil. And, in addition, they will ban the provision of services that enable Russia to ship oil by tanker,” Ms. Yellen said on CNN’s “State of the Union.” “It is possible that that could cause a spike in oil prices.”
Gasoline prices soared this summer due to limited supply as economies emerged from pandemic slowdowns and Russia’s invasion of Ukraine, adding to the economic pain Americans have been facing thanks to the highest inflation in four decades.
Prices have steadily declined largely because of decreased demand, lower crude oil market prices in response to fears of economic downturn and more domestic production.
In the face of two consecutive quarters of negative growth and continued interest rate hikes by the Federal Reserve, there is widespread concern that the U.S. is on the brink of tipping into a recession.
Ms. Yellen expressed confidence in the Fed amid a strong labor market but warned there’s a “risk when the Fed is tightening monetary policy to redress inflation, so it’s certainly a risk that we’re monitoring.”