With hostilities now raging in Ukraine and a shroud of uncertainty cast over the world energy market, it’s worth noting that a significant portion of Hawaii is powered by Russian crude oil.

But even though roughly a quarter of Hawaii’s crude came from the Russian Far East in 2021, the company that runs the state’s lone refinery says it doesn’t anticipate any disruptions in supply because it can pivot to other sources with little problem.

However, oil prices, which already have been climbing for weeks in anticipation of the Ukraine conflict, are expected to continue to creep up by 20 cents to 60 cents in Hawaii, with most of the increase occurring in the summer.

“Five dollars a gallon for regular unleaded gasoline in Hawaii is within the realm of possibility,” said Shahriar “Shasha” Fesharaki, executive vice chairman and managing director of Facts Global Energy in Honolulu.

For now, instability threatens the global energy market as one of the world’s biggest oil producers, Russia, pounds away at its neighbor, Ukraine, while the United States and its allies search for new ways to punish the aggressor.

Fesharaki said there will certainly be a run-up in crude prices with a geopolitical premium baked in.

But the question is: Will sanctions land on Russia’s lucrative oil business? The Biden Administration has said it plans to steer clear of the energy sector to avoid passing on the pain to the rest of the world, including a very vulnerable Europe.

Russian oil exports reached 7 million barrels per day in 2021 — equal to nearly 10% of global oil demand. A full disruption would be the biggest shortfall in oil market history — exceeding the temporary 5 million barrels per day cutoff that occurred after the attack of the Saudi Arabia oil field by Iran in September 2019, Fesharaki said.

Fesharaki said he believes sanctions on crude oil production are unlikely because of how important Russia is to the global energy picture.

“Given current prices, a recovering global economy, and it being an election year in the USA, we do not think we will see any sanctions on Russian energy exports,” he said. “That being said, until we get more clarity on the situation, we expect crude prices to reach $110 a barrel, perhaps even more in the coming weeks.”

The situation could be tempered by Iranian barrels entering the market in the second half of 2022 as a new deal with Iran, and its nuclear program, looks promising. An Iran deal, he said, would add another 1.5 million barrels of crude into the market.

Russian crude oil has played a prominent role in Hawaii’s oil mix in recent years. In 2020, more crude came to Hawaii from Russia than any other part of the world. In 2019, more than 9 million barrels of Russian crude were shipped to the islands, representing about a third of the state’s oil imports that year.

In 2021, 64% of crude imports to Par Hawaii’s oil refinery in Kapolei were sourced from Libya, while approximately 25% came from Russia. The balance arrived here from Argentina and other places around the world.

Par Hawaii President Eric Wright said the company diversifies its crude oil supply sources to provide energy security for the state.

“Historically, a portion of our crude oil has been sourced from Russia, in part because it allows us to produce a mix of fuels that are a good match for Hawaii’s demands,” Wright said in an emailed statement.

Wright said so far there has been no impact on the Kapolei refinery’s crude supply.

“However, our traders continue to closely monitor this situation. If there is an interruption to crude supply patterns, we are confident we will be able to access other sources of crude oil for Hawaii’s fuel needs,” he said.

The company selects the crudes for their lower sulfur levels to make fuel oil for Hawaiian Electric Co.

Hawaiian Electric spokeswoman Shannon Putnam said Par Hawaii has assured the company there will be no interruption in crude supplies, and officials are confident they will be able to generate power without interruption.

In addition, Hawaii’s largest utility keeps a one- to one-and-a-half-month supply of fuel oil on hand as backup just in case, Putnam said.

While supply may not be a worry, the price of oil is. With oil prices expected to keep rising, it will push electricity rates higher, she said, adding that because Hawaiian Electric doesn’t make any profit on fuel acquired for power generation, the cost of fuel oil is passed through to customers.

Fuel and power generation aren’t the only economic categories likely to see rising prices in Hawaii.

Carl Bonham, executive director of the University of Hawaii Economic Research Organization, said food is also a prime candidate for additional inflation under the pressure of rising fuel prices.

The cost of crude oil affects wheat and corn prices, he said, because oil powers the machinery that harvests the crops, and fuel is used to transport the commodities to market.

The situation comes on top of the inflation Americans have already been experiencing for months.

“More inflation — exactly what we didn’t need,” Bonham said.

It’s unfortunate he said, because food and energy inflation hurts the neediest households the most.

“In the next few months, we’ll probably see higher prices, some larger than others,” he said. “Eventually there may even be higher airfares.”

The Federal Reserve was expected to raise interest rates over the next year to help fight the inflation, but Bonham said that plan is likely being reconsidered now.

“High inflation is a concern, but you don’t fight temporary supply shocks by cutting demand,” he said.

As of Friday, Hawaii had the second priciest gasoline in the nation (behind California) at an average price of $4.50 at the pump, according to GasBuddy, a tech company that tracks gas prices. On Oahu, the average reached $4.44, up 1.3 cents from the day before.

Most states should expect to see a five- to 10-cent jump in gasoline prices over the next week or two, GasBuddy analyst Patrick De Haan said Thursday after the Russian attack.

“The impact is on Americans’ wallets,” he said. They will be paying more at the pump, evenly distributed across much of the country.”

Claudia Rapkoch, public affairs officer with the state Office of Energy, said Hawaii is more reliant on foreign crude oil than most states, which is why it should step up its focus on developing locally produced energy, including not only renewables such as solar and wind but bio-fuels and other technologies showing promise.

“The answer to the crisis is to separate completely from that reliance,” she said.

Putnam said Hawaiian Electric is working to add more renewable resources and battery storage to island grids in an effort to stabilize rates for customers and reduce dependence on oil for power generation. Since 2008, the utility has reduced its oil consumption by 113 million gallons, or about 25%.

Rapkoch said Hawaii is on track toward reaching its goal of 100% renewable energy by 2045. The state is closing in on 40%, she said.

“Events like this remind us we should not take the proverbial foot off of the gas pedal (trying to reach that goal),” she said. “And, yes, the last 20% is always hardest to achieve, but we will be looking to new technologies and innovations to get across the finish line.”