Gas prices just hit a record high. Here's what Biden's ban on Russian oil means for prices at the pump.

• President Biden is set to ban the importing of Russian oil, natural gas, and coal, Bloomberg said.
• The move is a major hit to Russia's energy sector, which plays a critical role in its economy.

President Joe Biden is poised to ban Russian oil as early as Tuesday, reports say, marking a major step toward crippling the Russian economy in response to Russia's invasion of Ukraine.

It also heightens the risk of even higher gas prices. The average price per gallon in the US hit a record $4.173 on Tuesday, eclipsing the previous high set in 2008, amid fears that the Russia-Ukraine conflict would further strangle the crude market.

The president is expected to end the importing of Russian commodities, including oil, natural gas, and coal, Bloomberg reported on Tuesday morning. Russia's energy sector is key to its economy as the country was the third-largest producer of crude oil in 2020, the US Energy Information Administration said. By banning oil imports, the White House is hurting Russia in an area ignored in the US's initial set of retaliatory sanctions.

The White House said on Tuesday that Biden would "announce actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine" at 10:45 a.m. ET. The move came after bipartisan efforts to ban Russian oil emerged in Congress over the weekend.

The crude ban severs one of the biggest ties left connecting the US and Russian economies. Russia leans heavily on its oil businesses to finance its government and military, and the US relies on Russian oil, to a certain degree, to keep its gasoline supply stable. Should other countries follow in the US's footsteps, Russia's massive oil trade would suffer a huge drop in demand.

The UK is set to follow in the US's footsteps, with Politico reporting that the government intends to ban its importing of Russian oil. The EU, meanwhile, presented a plan on Tuesday to cut Russian gas imports by two-thirds in 2022, The Washington Post reported.

Gas could hit $5 a gallon

The ban does come with some potential drawbacks for the US economy. Banning Russian oil stands to exacerbate the gap between supply and demand that's already driven prices to stifling highs.

"It's a dire situation and won't improve any time soon," Patrick De Haan, head of petroleum analysis at GasBuddy, said Monday. "The high prices are likely to stick around for not days or weeks, like they did in 2008, but months."

Russian oil only counted for roughly 3% of US crude imports in 2021, and shipments have slowed through 2022, Bloomberg reported, citing data from intelligence firm Kpler.

Still, some are already bracing for the highest gas prices in recent history. The oil embargo stands to lift crude prices as high as $150 per barrel, Mark Zandi, chief economist at Moody's Analytics, said in a Tuesday tweet. That would translate to an average gas price of roughly $5 per gallon, and "much higher than that" in pricier states like California and New York, he added. That would be the highest average gas price in data going back to 1990, according to the EIA.

Biden has been adamant that he'll work to counter the surge in gas prices. The president said late last month he was cognizant of the pressures felt by Americans already hit by historic inflation, adding he "will do everything in my power to limit the pain the American people are feeling at the gas pump."

More recently, Biden announced the US would release 30 million barrels of oil from the Strategic Petroleum Reserve in conjunction with smaller releases from 30 other countries. The US is "ready to do more if necessary," he added while unveiling the action during his first formal State of the Union address. Still, the release only covers about two days of average nationwide consumption and serves as more of a temporary aid than a lasting fix.

The latest in a pile of 'devastating' sanctions

The legislation joins a collection of sanctions meant to hobble Russia's economy in response to its attack on Ukraine. The last few weeks have seen the US, UK, European Union, and other countries unite in opposition to Russia's invasion, and retaliatory measures have evolved from mostly targeting Russia's financial sector to include yacht seizures and aircraft bans. The punitive actions levied by the West imposed "devastating costs" on Russia, the White House said in February.

Early forecasts and anecdotal evidence bear that out. The country has already seen rampant bank runs as the ruble's value plummeted to record lows and Russians rushed to protect their savings. Though much of the damage won't emerge in economic data for months, JPMorgan economists said Friday that Russia's economic output could shrink 11% as sanctions "hit their mark."