Gas prices at a Shell Station and a BP Station...

Gas prices at a Shell Station and a BP Station on Middle Country Rd. in Selden on Wednesday, Credit: Newsday/Thomas A. Ferrara

Long Islanders already feeling the squeeze of inflation should brace for higher prices as Russia escalates the conflict in Ukraine.

Earlier this week, the United States and European countries issued sanctions against Russia for sending troops into two regions in Ukraine. Russia may retaliate by limiting the volume of oil it sends west, curbing the global supply of the commodity and driving up fuel and energy costs, economists said.

There's more to watch out for: The stock market could decline further, and regional businesses have been warned to be on the alert for cyberattacks.

But on the Island, the most significant consequence of the conflict would likely be companies raising prices to pass on swelling energy and transportation costs, according to John Rizzo, an economist and professor at Stony Brook University.

"The sanctions that have been imposed so far will trickle through in terms of higher gas prices and oil prices," Rizzo said. "In this case, uncertainty and fear can have as big of an effect — in terms of raising prices — as an actual decline in supply."

Gas prices on Long Island averaged about $3.71 a gallon on Wednesday and seasonal trends already were likely push them up to at least $4 a gallon this spring, according to Patrick De Haan, head of petroleum analysis at GasBuddy, an app that tracks fuel prices.

But cost increases could be more dramatic due to the conflict in Ukraine. Russia produces about 10% of the world's oil supply. A cut in its exports would increase costs beyond the current $92 a barrel, De Haan said.

Also, "Russia could weaponize the price of oil," De Haan said. "They know President [Joe] Biden has been trying to reign in higher oil prices. So that's a card they could play, and that could drive prices in Long Island even higher."

Elevated rates for diesel fuel would push up the cost of bringing virtually all goods onto the Island — and bump up prices, Rizzo said. Businesses in the service sector may have to pass off higher heating and energy costs as well, he said.

"It will increase the price of doing business, to the extent the companies transport their goods and they use energy," Rizzo said.

The U.S. Chamber of Commerce advised businesses to secure their systems from what the organization described as "heightened cyberattack threats." Regionally, the Long Island Association business group is encouraging companies to be vigilant, CEO Matt Cohen said.

"In collaboration with our members with expertise, we are preparing a cybersecurity resource guide to help companies better understand this growing threat and protect their digital assets," Cohen said in a statement.

Although Russia's actions may have contributed to the stock market's slump, falling prices are more likely a correction from the past year-and-a-half, when market indexes soared to records, according to Mitchell Goldberg, president of ClientFirst Strategy, an investment adviser in Melville.

He expects Federal Reserve policies and planned interest rate hikes to have a larger impact on the stock market than geopolitical concerns.

"Typically within six months, these things usually restore themselves," Goldberg said.

Landmark Wealth Management LLC, an investment adviser based in Melville, hasn't been fielding many calls from panicked clients because its customers understand market cycles and volatility, partner Chris Congema said.

"People are always concerned and nervous," he said. "They just understand that the market comes with volatility, and we’re coming off a couple of pretty good years."

With Matthew Chayes

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