On Friday, oil prices spiked as fears that tensions between Israel and Iran were spreading. This spike in prices has raised concerns about how that would greatly affect U.S. drivers’ gasoline prices. The war deepened when Israel began hitting Iran’s nuclear program, and Iran responded with missile strikes on Israel. According to a number of experts, that kind of resulting instability could mean a big increase in gasoline prices within just a few days.
On Friday, Brent crude oil futures jumped more than 8%. Prices might then spike from $73 per barrel up to $100 or even $120 per barrel. Fears about the Strait of Hormuz have sent worries about supply through the roof. This vital shipping lane is the lifeblood of about 1 in 5 barrels of the world’s oil supply. Recent unilateral closures The Iranian government has continued to exert its control over this vital passage, including claiming the right to disrupt traffic on this critical route.
As of this writing, the national average price for gasoline in the United States is $3.13/gallon. Outlook Analysts are warning that escalating oil prices will increase U.S. gas prices by almost 8%. This proposed increase would make the average price at least $5.13 per gallon.
Indeed, the immediate effects of the recent round of hostilities have already started to panic the market. Patrick de Haan, a petroleum analyst, noted that:
“We may have just seen the tip of the iceberg in terms of price hikes.” – Ramanan Krishnamoorti
It became even more perilous when Israel began to conduct series of airstrikes on key components of Iran’s nuclear architecture. The assassinations were reportedly justified by the resulting deaths of a few nuclear scientists and senior military commanders. Firing back late on Friday, Iran fired dozens of ballistic missiles at Israel.
“Gas prices will likely start to rise across much of the country later this evening in response to Israel’s attacks on Iran, which have caused oil prices to surge.” – Patrick de Haan
Richard Joswick, a market analyst, reflected on past events where similar exchanges had occurred, stating:
History has shown that prices usually level out following times of conflict. The current geopolitical climate adds uncertainty and concern about potential future price spikes. Krishnamoorti further emphasized the potential consequences:
“When Iran-Israel exchanged attacks last time, prices spiked, then fell once clear, not escalating and had no impact on oil supply.” – Richard Joswick
Americans are even bracing for a rise in gas prices. Energy industry experts already expect gas prices to increase by at least 10 and possibly 25 cents per gallon in the near future. The recent volatility in oil markets reminds us of just how rapidly geopolitical tensions can turn into economic repercussions for average consumers.
“If we see any throttling back of the Strait of Hormuz, we’ll see a massive increase in the price of oil, and that will impact everything in the U.S.” – Ramanan Krishnamoorti
As consumers brace for rising costs at the pump, experts anticipate that gas prices could increase between 10 to 25 cents per gallon in the immediate future. The volatility in oil markets underscores how quickly geopolitical tensions can translate into economic repercussions for everyday consumers.
