How the War With Iran Could Change Your Gas Prices This Summer
Written by
Travis Woods
Edited by
Gary Dudak
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Global oil prices have spiked ever since President Trump, along with Israel, launched an air offensive against the country of Iran. Per NBC, attacking the oil-rich Iran immediately caused U.S. crude oil prices to increase by 6.5%, while international numbers surged by 8%. That’s after oil prices had already risen by a dizzying 17% in recent months.
As of April 16, the national average price is $4.10 per gallon per AAA, but it’s much higher in some states, including well above $5 per gallon in Washington and California.
What This Means for Gas Prices Right Now
Oil prices are surging due to overall fears that fuel supply lines will continue to be disrupted, especially around the nearby Strait of Hormuz, which borders Iran, Oman and the United Arab Emirates. The strait accounts for 20% of the world’s oil traffic.
What To Expect by This Summer
Summer is a period of increased drive-time for many Americans — from Memorial Day or the Fourth of July to Labor Day, many choose to hit the road for vacations, family visits, barbecues and more. The ripple effects of this current conflict could very well extend to the summer months and beyond; however, as the situation is still unfolding, it’s difficult to predict just how severely gas prices will be impacted by June, July and August.
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If the current conflict in the Middle East deescalates, the geopolitical risk to oil premiums will deescalate as well, leaving summer gas prices to hopefully drop down much closer to last summer’s numbers (which were approximately $3.13 to $3.16 per gallon).
If this war with Iran were to drag on, however, or to escalate to other countries in the region, crude oil prices could spike and a growing number of U.S. regions could see gas averages run as high as $4.50, $5.00 or even $6.00 per gallon, according to various reports.
Bottom Line
Gas prices will increase because of the Iran conflict, most likely hitting $5.00 per gallon by summer if it is not resolved. How high those numbers continue to go, and for how long, remains to be seen.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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