Drivers across the U.S. are bracing to increase gas prices tensions rise between Israel & Iran. In fact, the average price of a gallon of gas as of today is $3.13. Experts caution that it can rise by almost 8% over just a few days in the wake of recent Israeli military assaults on civilians in the region.
Patrick de Haan, head of petroleum analysis at GasBuddy, tweeted this useful thread. He testified that the price of a typical gallon of gas would rise an average of 10-25 cents. Plan on a major increase in the coming months. This increase can be attributed to a particularly dramatic spike in oil prices, up more than 8% following the recent strikes traded between Israel and Iran.
The war was triggered when Israel preemptively attacked Iranian nuclear facilities and senior military leaders. In response, Iran executed the largest aerial invasion since WWII with a raid of nearly 100 drones. Forces shot them down before they could deliver damage.
If that happens, there are fears the current conflict will spiral out of control—even threatening the relative stability of the wider Middle East. That last one is particularly relevant, given this region’s ongoing importance to global oil production. Any disruption here would have grave consequences on global oil supply and prices.
The ensuing price spike at the pump can be expected nationwide late this evening and into tomorrow morning. This jump is a direct result of Israel’s ongoing attacks on Iran, which have driven oil prices sky high,” explained de Haan. He added, “For now, I expect the rise to be noticeable, but limited.”
The recent developments delivered a one-two punch to Wall Street. The Dow Jones Industrial Average closed down almost 770 points, a loss of 1.7%. The S&P 500 fell by 1.1%, while the tech-heavy index dropped 1.3%. In Europe, the STOXX Europe 600 index was down by close to 1% by late afternoon local time.
Since crude oil is the largest input in gasoline, oil price increases immediately translate into higher fuel prices at the pump for Americans. The recent surge in Brent crude futures adds further evidence to the relationship between geopolitical tensions and market movements.
