What could happen to gas prices if Biden issues new sanctions against Russian energy sector?

New sanctions Energy sector of Russia could temporarily raise gas prices and change oil export patterns, according to experts who analyzed the global impact of penalties previously imposed on the country’s fossil fuels.

President Joe Biden is reportedly considering imposing new sanctions on Russian energy before he leaves office, the Washington Post reported, citing four people familiar with the matter. Sources suggested such a move could deliver President-elect Donald Trump more leverage in potential negotiations with Russian President Vladimir Putin.

If Biden continues with sanctions, an analysis of US sanctions against Russia at the start of the conflict with Ukraine shows that energy sanctions could result in higher gas prices globally.

The price of natural gas has started to rise amid tensions in Russia in 2022, but reached a record high in the US after the country invaded and sparked a multi-year war with its neighbor, Ukraine.

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“Western sanctions on Russia’s energy sector have reduced Russian revenues, but have also created costs for the sanctioning nations,” the Federal Reserve Bank of St. Louis in an overview of the impact of energy sanctions on Russia.

Biden and Western countries imposed sanctions on Russian energy after the country invaded Ukraine, resulting in a spike in diesel prices worldwide because “there simply weren’t enough refineries to meet the demand for diesel, especially after the US and other countries stopped buying export energy from Russia,” according to an analysis of economic data by the Federal Reserve (FRED).

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According to FRED, the producer price index (PPI) for diesel in June 2022 was approximately 109% higher than in June 2021. However, data from the Bureau of Labor Statistics shows that prices have fallen significantly since then.

The American Enterprise Institute (AEI), a public policy think tank, says sanctions can have a variety of effects, such as “significantly changing oil export patterns, redirecting trade flows in economically inefficient ways, and forcing sanctioned countries such as Iran, Russia, and Venezuela to sell crude oil at below-market prices.”

While the move could raise oil costs, one proponent of the idea suggested that the end of the election could be reason for Biden to proceed with the sentence.

“The Biden administration was concerned about rising gas prices and worsening inflation. That was the main limitation of their Russia sanctions policy, the domestic consequences,” Edward Fishman, senior research fellow at Columbia University’s Center for Global Energy Policy, told the Washington Post. reported. “But the elections are over and inflation is under control. The reasons to be this cautious about sanctions no longer apply.”

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The report comes just days after the US issued new sanctions against several Russian-linked entities and individuals involved in the construction of Nord Stream 2, the massive undersea gas pipeline linking Russia to Germany.

Fox News’ Breanne Deppisch contributed to this report.