NJ gas price plunge ends as Trump targets Putin’s oil empire

⛽ New Jersey gas prices dropped 18 cents in the past week

⛽ Trump’s proposed tariff on Russian oil sent prices surging more than 5% overnight

⛽ Analyst said “cooler heads” may soon stabilize the market

A substantial drop in the average price of gas in New Jersey may be short-lived thanks to the initial market reaction to tariffs against Russia's oil industry threatened by President Donald Trump.

Earlier in the week, gas prices had dropped 18 cents a gallon in New Jersey to go below an average $3 per gallon. Oil prices had dropped to their lowest level since 2021, at $56 per barrel, as OPEC had increased production.

The sanctions announcement caused a reversal and drove oil prices back up over 5% on Thursday, according to Patrick DeHaan, head of petroleum analysis at GasBuddy. That could cause a slight increase in New Jersey gasoline prices following the announcement about the sanctions.

"As a part of oil prices going up, gas prices are also up about 3.5% today. So, that could slam the brakes on the decline," DeHaan told New Jersey 101.5.

The Trump administration said the new sanctions are aimed at moving President Vladimir Putin to the negotiating table as he continues to frustrate the U.S. administration’s efforts to bring an end to Moscow’s war in Ukraine. The sanctions unveiled Wednesday against oil giants Rosneft and Lukoil followed months of calls from Ukrainian President Volodymyr Zelenskyy, as well as bipartisan pressure on Trump to hit Russia with harder sanctions on its oil industry.

That's the economic engine that allows Russia to continue to execute the grinding invasion of Ukraine even as Moscow finds itself internationally isolated. Trump said he hopes the new sanctions will help make Putin “reasonable” and negotiate an end to the war.

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Analysts expect volatility but say rebound may be short-term

The late-week spike in prices could also be an overreaction to a situation.

"Cooler heads typically prevail in a matter of days. So yes, the market certainly could be looking at this a little bit more closely, and there could be positive developments as a result of the threat of sanctions or sanctions," DeHaan said. "Next week, oil could abruptly go back the other way if we see a development between now and then. This is obviously a very volatile time and very difficult to predict exactly what will happen.

Sanctions will likely send prices higher for Russian oil. In 2022, an embargo impacted the northeast United States and Europe as those markets are more dependent on it.  At the time, DeHaan said, there was a lack of product.

"Back in 2022, the northeast saw a huge surge because you were competing for product amidst lack of refining capacity in the northeast who were competing more with Europe. A massive new refinery down in Nigeria has helped alleviate that crunch," DeHaan said.

Factors that will also blunt any price spikes are the upcoming Thanksgiving holiday and the traditional November decline in prices. But it all depends on the impact of the sanctions.

"If President Trump holds to his guns here and puts pressure on Russia, this could, you know, cause a reversal and cause gas prices to increase for as long as this, as long as these sanctions stick on Russia," DeHaan said.

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