As the United States and its allies increase Russia’s cost of its military invasion of Ukraine, Virginians will likely feel the price at the gas pump, no matter what they think of Russian President Vladimir Putin and of his grievances against NATO.

With gasoline prices already rising due to demand and inflation, Russia’s murderous assault on a country on Europe’s doorstep, if not living room, is generating the kind of uncertainty that financial markets hate and whose consumers have to bear the consequences.

“The typical person really doesn’t care about Ukraine,” said Kent Engelke, chief economic strategist and managing director of Capitol Securities Management Inc. in Richmond. “It’s not a core value. What interests us are oil prices.

The United States imports about 700,000 barrels of oil every day of the 18 million barrels it consumes, Engelke said. “Where is this going to come from?”

President Joe Biden has begun imposing a series of heavy economic sanctions on Russian banks, oligarchs and other institutions that support Putin’s regime in an attempt to make them pay a high price for aggression against a sovereign nation.

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Biden and his U.S. allies announced on Thursday that they are imposing “sweeping financial sanctions and tough export controls that will have a profound impact on Russia’s economy, financial system, and access to cutting-edge technology,” he said. the White House said in a statement.

Sanctions have yet to target Russia’s critical energy sector, the source of most of its wealth, due to Putin benefiting from higher consumer prices for oil, natural gas and other products crucial, but the will to do so may ultimately be the clearest measure of American and European resolve.

“If the Europeans are serious about it, they will apply sanctions to [Russian] natural gas exports, but it’s going to cost them dearly,” said Stephen Long, associate professor of political science and global studies at the University of Richmond.

German Chancellor Olaf Scholz, in his first political crisis since taking over from Angela Merkel, suspended certification of the Nord Stream 2 gas pipeline which Germany hoped would supply him with natural gas from Russia to replace coal and nuclear as a source of energy.

Biden followed suit the next day with sanctions against the company building the pipeline, but Long noted, “There’s no gas flowing through the pipeline yet and it’s still there — they’re not destroying it. “

Virginia’s elected leaders – from members of Congress to the governor’s office – voiced strong support for Ukraine and condemned Russia as the scope of the military invasion became clear.

“Putin’s invasion of Ukraine is an attack on a sovereign nation and will have devastating consequences for Ukrainian citizens,” Gov. Glenn Youngkin, a Republican, wrote on Twitter Thursday morning. “This senseless and unprovoked attack undermines democracy around the world and we must hold Russia accountable.”

Richmond resident Phil Wilayto disagrees that the attack was not “provoked”. A longtime anti-war activist and left-wing trade unionist, Wilayto argues that Russia “has legitimate security concerns about NATO’s eastward expansion.”

He accuses the United States and its allies of helping to orchestrate a coup against the pro-Russian former president of Ukraine in 2014, raising concerns among Russian-speaking residents in parts of Ukraine, including including Crimea, which Putin abruptly annexed later that year.

Whether the invasion is “morally right or politically wise, it’s not a simple land grab,” said Wilayto, editor of the Virginia Defender newspaper, which published its detailed account of the conflict’s origins earlier this month. .

Former Governor Jim Gilmore dismisses Russian security concerns as ‘rubbish’ and sees the invasion of Ukraine as Putin’s first step to reassert the dominant role in Europe that ended with the Cold War and the dissolution of Soviet Union.

Long, at UR, agrees that Putin has no valid justification for the invasion. “It’s part of a scheme to test NATO’s resolve,” he said.

Gilmore and U.S. Sen. Mark Warner, D-Va., say Putin’s actions have strengthened NATO rather than weakening it, but the invasion has heightened economic uncertainty here at home, where the Federal Reserve is is already preparing for a series of interest rate hikes to counter high inflation.

Russia’s invasion of Ukraine is introducing “geopolitical uncertainties” to the economy, but it’s too early to tell how that might affect the U.S. economy and interest rates, said Thomas Barkin, chairman and CEO of the Federal Reserve Bank of Richmond.

Speaking to business, government and civic leaders Thursday at a luncheon in Colonial Heights, Barkin said it was time for the Federal Reserve Bank to move toward interest rate normalization starting in historic lows of 0%.

“The short answer is I don’t know,” Barkin said when an audience member asked about the impact of the Ukraine invasion on Fed monetary policy.

“The longer answer is that most of my colleagues [on the Fed’s governing board] — and certainly my own perspective — is it time to normalize rates,” said Barkin, who was a 2021 voting member of the Federal Reserve Bank’s Federal Open Market Committee, or FOMC, which makes key decisions on interest rates. ‘interest.

“It’s time to normalize rates because underlying demand in the economy is quite strong, unemployment is low, labor markets are very tight, and inflation is high and persistent,” he said. he declared.

“It’s a classic period where we would want to raise rates to try to get stable prices,” Barkin said.

“Does this Russian invasion of Ukraine change this underlying logic? The answer is no one knows exactly where this is going to lead,” he said.

The biggest vulnerability in the U.S. economy is rising gasoline prices, which has already prompted Youngkin to roll back Virginia’s last 5-cent-per-gallon fuel tax hike by 12 months and Biden to consider measures to reduce federal gas. tax.

Virginia Democrats argue that the state tax has little to do with the price of gas at the pump.

“The news we hear from Europe will have a lot more to do with gas prices than with the gutting of this transportation revenue stream,” Del said. Vivian Watts, D-Fairfax, during a state budget debate. Thursday in the House of Delegates.

Potential oil supply disruptions — from foreign wars to domestic pipeline supply issues — “tend to drive up crude oil prices,” said AAA Virginia spokesman Morgan Dean.

“The market doesn’t like uncertainty, and that’s where we are today,” Dean said.

Oil suppliers got another example of the system’s vulnerability on Thursday, when an apparent leak at a major interstate pipeline disrupted the flow of products along the East Coast through Virginia.

Less than a year after a computer ransomware attack shut down the Colonial Pipeline, the former Plantation Pipeline, now called Products (SE) Pipeline, halted deliveries Wednesday night after a burst of oil was discovered in a storm sewer in an Atlanta suburb.

A spokeswoman for Morgan Kinder, the Houston-based pipeline owner, said the company does not know the cause or extent of the leak, but is working to restore service to customers in Virginia and to other southeast markets.

“I was more targeted than overall today,” Michael O’Conner, president of the Virginia Petroleum & Convenience Marketers Association, said Thursday. “I don’t think there is any doubt that this is a problem in the system that will take time to resolve.”

Beyond oil, Virginia matters little to Russia or Ukraine, which rank 41st and 42nd as state trading partners, according to the Virginia Economic Development Partnership. Virginia’s coal exports could suffer if the United States imposes sanctions on energy and mineral exports, the partnership said, but that has yet to happen.

But Wilayto predicted that the effects of the sanctions would be felt in both directions.

“I think there are going to be a lot of unintended effects,” he said. “There are going to be economic consequences for us in this country in terms of rising oil and gas prices.”

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Writer John Reid Blackwell contributed to this report.