Rising prices from Russian oil ban may remind consumers on need for petroleum products
HOUSTON - Before President Biden banned all imports of Russian oil to the United States, we were only taking roughly 700,000 barrels a day. Still, the move could have the effect of driving prices even higher, because of the ongoing turmoil and uncertainty. Consumers will feel the surging prices at the pump, and many other places.
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Houston's Three Brothers Bakery may not be the first place you imagine would feel the squeeze from rising oil prices, but it's just the latest insult. Inflation and supply-chain challenges have already made every single ingredient more expensive.
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"One of the chocolate manufacturers we use is not in business right now," says Three Brothers owner Bobby Jucker. "(They) just shut it down; couldn't get cocoa from the Ivory Coast."
Now, oil is becoming an issue. Jucker says fuel for his delivery trucks to move around the city is more expensive; suppliers are charging more to deliver; even plastic bags are hard to find. Jucker expects it all to continue.
"We're having to substitute, and make things work around what we used to use and what we know works for us."
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So much of our modern lives are tied to oil and petroleum products. From fuel and components for our vehicles, the clothes we wear, plastics, cosmetics, packaging, construction, the list goes on and on.
"Oil and gas and fuel and energy prices are just the basic parts of the economy that keep everything moving," says commercial finance expert Jake Clompton. "Really, it just makes everything more expensive."
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In the Three Brothers bakery case, there are Ukraine-themed cookies helping to raise money for relief, and added expenses are being taken in stride, for now. Prices have not risen for customers, margins are tighter, but the bills are being paid. Bobby Jucker says it's a cost worth paying.
"I really feel for those people in Ukraine, and what they're going through. You think about what we're going through: this is really nothing in the big picture."
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But not everyone is avoiding passing prices onto consumers. If oil prices continue to rise for an extended period of time, as many analysts expect, stubborn inflation may stick around for some time, too.