The impact on New Mexico after Russia invades Ukraine
ALBUQUERQUE, N.M. — The world is watching the reality of war in Europe after Russian President Vladimir Putin launched a large-scale attack on Ukraine.
"Putin is the aggressor, Putin chose this war and now he and his country will bear the consequences," said President Joe Biden after issuing harsh sanctions aimed at hurting the Russian economy.
University of New Mexico law professor Joshua Kastenberg says it’s a move just short of military action.
“Russia relies on foreign loans and if the Russian economy is shuttering under sanctions it will have a more difficult time getting loans through international banks and governments,” Kastenberg said.
However, there is also a concern for New Mexico’s economy – especially when it comes to how much people will be paying at the pump.
"The national average has the potential to eventually rise to four dollars a gallon,” says Patrick Dehaan, the head of petroleum analysis for GasBuddy. By May, he predicts New Mexicans could be paying more than $4 per gallon.
"Keep in mind the Russia situation is not the only factor pushing oil and gasoline prices up," Dehaan said. "Motorists across the country are starting to see the switch to summer gasoline, of course, summer gasoline is more costly, mandated under the EPA."
It could also impact your plane ticket prices, ride shares – even what you buy at the grocery store since trucks need gas to get them to you.
"That impact may be more significant should the situation continue to escalate in the days ahead," Dehaan said.
Oil prices skyrocketed, reaching close to a hundred dollars a barrel, according to Oilprice.com. However, for states like New Mexico, which produces a million oil barrels a day, this increase could be beneficial.
"For the entire month of February, prices were well over $80 a barrel so New Mexico was already receiving essentially a revenue bump there," said Rep. Nathan Small, D-Las Cruces, who is the vice chair of the House Appropriations and Finance Committee.
Those high prices brought in $5.3 billion in state and local taxes in 2021, according to the New Mexico Oil and Gas Association website. However, Small said gas at the pump could hurt that benefit.
"The very high energy prices can also slow economic growth which theoretically at least lead to reduced demand for oil on a worldwide scale," Small said.
Then there’s the safety concern for New Mexico – especially after Putin warned there would be consequences never seen in history for countries that intervened.
Dr. Emile Nakaleh, the director of the Global and National Security Institute at UNM, said despite New Mexico having nuclear storage depots, he doesn’t believe a war of that magnitude is going to happen.
"I think this is a very, very unlikely possibility,” Nakaleh said. "That would be a doomsday scenario that no sane person would want to engage in."
Nakaleh believes Putin’s threat was more likely directed at NATO nations that border Ukraine.