US gas prices hit all time high as Russian oil purchases blocked. Half of US adults lost IQ points due to lead pollution. Ukraine-Russia conflict will cause global food price crunch.
US gas prices hit all time high as Russian oil purchases blocked
The US, UK and EU have moved to cut purchases of Russian oil and gas. President Biden says the US will ban all new purchases of Russian oil and gas. The UK is also banning new purchase, while EU countries say they will reduce their purchases by two-thirds. EU countries are heavily dependent on Russian oil and gas, importing six times more than the US.
Gas prices in the US and elsewhere were already on the rise even before the announcement due to rampant speculation that countries might impose such a ban. Gas is now averaging a record $4.17 per gallon, with diesel costing even more. It may rise further in coming days due to rampant speculation. The previous record average was set in July 2008 at $4.10, which, accounting for inflation, would be around $5.37 in 2022 terms.
Why cut off Russian oil purchases now?
The US and its Western partners have taken this difficult and controversial step after more than a week under crippling sanctions on has failed to halt the Russian advance on Ukraine. In fact, Russia’s military assault on Ukraine has only intensified in recent days with rampant shelling of civilian areas.
Sanctions previously exempted purchases of Russian oil and gas. But with the existing sanctions slow to bite, Western leaders believe it is urgent to cut off Russia’s largest source of revenue. International oil and gas purchases bring about $1 billion a day into Kremlin coffers.
It’s doubtful this will have any immediate impact on the ground in Ukraine. In fact, if recent events are any indicator, Putin may redouble his efforts to take Kiev. The hope is that cutting off Russia’s largest revenue source will starve Putin’s war machine.
What’s being done to minimize pain at the pump?
While the US doesn’t source much of its oil and gas from Russia, it is looking for alternative oil suppliers to help ensure global supply and stabilize prices. The White House is even reaching out to countries that US has generally regarded as “rogue states”. Firstly, US negotiators are working to bring a quick resolution in talks for the US and Iran to rejoin the 2015 nuclear deal. Getting a deal signed quickly will not only reduce worries over Iran’s uranium enrichment program, but will also see Iran’s oil return to the international market.
Secondly, the US has also been in talks with representatives of Venezuelan president Nicolas Maduro this weekend. This is significant since up to now, the Biden administration has perpetuated former-President Trump’s diplomatic fiction that Maduro was not even president of Venezuela. Encouragingly, Maduro has signaled openness to improving ties between his government and the United States.
Half of US adults lost IQ points due to lead pollution
A new study in the journal Proceedings of the National Academy of Sciences estimates that half of American adults lost IQ points due to exposure to leaded gasoline as children. Leaded gasoline was banned in the US in 1996 and the study focuses on people born before then. On average, Americans born before 1996 lost 2.6 IQ points from inhaling car exhaust from leaded gas. But the losses are greater for people born in the 1960s and the 1970s at the height of US consumption of leaded gas. Americans born during that time frame may have lost 6 or 7 IQ points. Lead exposure is also linked to heart and kidney disease.
Ukraine-Russia conflict may cause global food price crunch
Ukraine and Russia are both major exporters of food grains such as wheat and barley. Together they export about a quarter of the world’s wheat. Their most important consumers are Asian and Middle Eastern countries, some of which were already suffering food shortages and rising prices even before the conflict. Now experts say that the conflict could ultimately double global wheat prices.
David Beasley of the World Food Program says 50% of Lebanon’s grain imports come from Ukraine. “Yemen, Syria, Tunisia – and I could go on and on – depend on the country of Ukraine as a breadbasket,” Beasley said.
But the conflict’s impact on global food supply doesn’t end there. According to Svein Tore Holsether, CEO of fertilizer company Yara International, supply chain disruptions are also affecting their ability to obtain necessary raw materials. Yara operates in more than 60 countries and is one of the world’s largest industrial suppliers of fertilizer. Yara also sources nutrients like potash and phosphate from Russia. Since it is based in Norway, Yara is not directly subject to sanctions. But the sanctions and other measures to isolate the Russian economy have created logistical chaos.
According to Holsether, “Half the world’s population gets food as a result of fertilizers. And if that’s removed from the field for some crops, [the yield] will drop by 50%”.
Holsether says the question is not “whether we are moving into a global food crisis. It’s how large the crisis will be”.
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