DALLAS — From a nearly empty outdoor market in the Ukrainian city of Mariupol, a 66-year-old woman named Vera Konstantinovna told a reporter for the Associated Press that she is indeed afraid of a potential Russian invasion.
"We are peaceful people. Russian, Ukrainians and Greeks live here, we are friendly towards each other, we are frightened by the threat of war," she said. "I am trying not to think about the worst. I do not believe there will be a war, though there still is a fear."
Energy analysts suggest, that while we should all care about the people caught in the middle of that potential war, there should also be some level of fear at worldwide gas pumps, too.
"The economic impacts could be significant if something were to happen over there," said Bruce Bullock, director of the SMU Cox Maguire Energy Institute, noting that supply and demand pressures coming out of the pandemic are already helping drive prices and U.S. inflation.
But, if Russia does invade Ukraine, and U.S. sanctions were to follow, then removing Russia's oil from the world market could drive prices up even more.
"It's all kind of been a perfect storm if you will to cause the global price of oil to increase," said Bullock.
"Our demand is going up. And if our supply is not there, the price will go up and it will continue to go up," said Jay Young with King Operating Company, an independent driller in Texas and Montana.
He believes the primary factor in rising oil prices now is a post-pandemic oil production pace that has yet to pick up enough speed.
"This recent spike in oil is not because of President Putin and because of Ukraine," Young said.
"That's not what this is. There are a few bucks that are in this price," he said of the Russia/Ukraine crisis. "But that's not it. It's all because of drilling. We're not drilling for oil in the United States. And when we're not drilling, we're taking that supply off."
Rice University's Baker Institute for Public Policy recently published its "Strategic Response Options if Russia cuts gas supplies to Europe." The working paper analyzes "Russia's intensifying challenges to physical and energy security in Europe" quantifying "the potential energy security consequences of a significant disruption of gas supplies from Russia to Europe."
The study also comes with a stark conclusion: that "winter is coming" in 2023, unless alternatives to Russian energy are increased.
"Russia could potentially deprive Europe of almost 40% of its gas supply and 10% of its total primary energy supply, while sacrificing gas revenues that will likely be largely offset by higher oil prices, assuming oil exports from Russia are not hindered," the report says.
"As unwelcome a crisis like this is," study co-author Anna Mikulska, PhD. said, "it is a reminder that Europe still needs gas, that this gas cannot come from one supplier. Especially one that is not particularly friendly towards the western world."
So, for the sake of a world economy, gas prices, and inflation, analysts say we should all care about what happens in Ukraine. While millions of Ukrainians, including Vera Konstantinovna, hope we are praying for them too.