Economists warn a Ukraine invasion could drive up already high living costs in the U.S.

(CNN) – New analysis warns an invasion of Ukraine by Russia could drive up the already high cost of living in the United States.

Economists say a potential conflict could rattle global energy markets and create a ripple effect that could impact millions of American households.

“Unfortunately, if Vladimir Putin invades Ukraine, it’s the American household that’s going to partially bear the burden of adjustment,” explained RSM Chief Economist Joe Brusuelas.

He said a Russian invasion could raise the cost of nearly everything having to do with energy.

Russia is the world’s second-largest producer of oil, and supply is already failing to keep up with demand. That’s partially why oil prices are increasing and prices at the pump are soaring.

An invasion or sanctions that cut off supply could send prices even higher.

President Joe Biden has acknowledged the consequences saying, “I will not pretend this will be painless.”

The big question is how high can crude oil rise?

RSM estimates if crude oil prices rise north of $110 a barrel, year-over-year inflation in the U.S. could top 10%, which would be the highest since 1981.

Energy prices are a huge factor in this red-hot inflation hitting your budget.

“How does this really impact me? It’s in the cost of everyday living, basically the things we don’t think about like heating our homes, like turning on the television, turning on your computer,” Brusuelas said.

Higher oil and natural gas prices could also mean higher costs for airfare and transportation.

The crisis in Ukraine could also rattle U.S. markets. Economists say if there’s an invasion, we could see a selloff in stocks as investors face the fear of an oil shock and higher inflation. It could also mean higher borrowing costs.

Economists warn that if inflation spikes above 10%, the fed could come under pressure to get prices under control, possibly rising interest rate hikes quicker to cool off inflation.

Copyright 2022 CNN Newsource. All rights reserved.