U.S. gas prices will continue climbing for weeks — and maybe months — due to the resumption of President Donald Trump’s war against Iran, experts warn.
Patrick DeHaan, petroleum analyst for GasBuddy, said Friday on social media that while oil prices were “taking a breather for today” after recently surging by $20 a barrel, he’s still expecting the national average cost of a gallon of gas to soon reach $4.20 to $4.30.
Shon Hiatt, director of the University of Southern California’s Zage Business of Energy Initiative, said oil markets apparently assumed that political pressure would force Trump to quickly end the war he launched without congressional authorization on February 28.
“Everyone had been making this bet that Trump would chicken out when things got bad, pull out and the war would end,” he told The Washington Post Friday. “But that hasn’t happened. It is not clear when this will end.”
The national average price for a gallon of gas is almost $4.11, up nearly $1 from $3.16 a year ago, AAA said Friday. Diesel is selling an average of $5.24 a gallon, up 40 percent from $3.74 over the same period, AAA said.
Trump’s war has repeatedly disrupted tanker traffic through the Strait of Hormuz, through which about one-fifth of international oil supplies from Persian Gulf countries traveled before the war.
Yemen’s Iran-backed Houthi rebels have also threatened to prevent Saudi Arabian oil from leaving the nearby Red Sea, and said they’d attacked two Saudi tankers there Thursday.
Bob McNally, a former energy adviser in the administration of President George W. Bush, said that gas prices “have just been unaligned with the fundamentals” and that July “will be the month we snap back to reality.”
“The latest outbreak of violence could really send oil prices a lot higher,” he told the Post.
That view was echoed by Ben Cahill, director of energy markets and policy at the University of Texas at Austin, who said, “The key buffers that got us through the first months of the oil shock have been worn away.”
“It will be harder to avoid a price correction and a steep price reaction when new disruptions are happening each day,” he told the Post. “They are already having a bigger impact on market psychology now.”
West Texas Intermediate crude oil futures were trading above $89 a barrel Friday morning, down from an opening price of $92.56 but up from $69.23 a month ago.
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