Global oil prices have spiked as President Donald Trump, along with Israel, launched an air offensive against the country of Iran. Per NBC, attacking the oil-rich Iran has 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.
What This Means for Gas Prices Right Now
Oil prices are surging due to overall fears that fuel supply lines will be disrupted (most especially around the nearby Strait of Hormuz, which borders Iran, Oman and the United Arab Emirates, and accounts for 20% of the world’s oil traffic). As a result, Forbes has already predicted that average American gasoline prices will rise above $3.00 per gallon within the first week of March; if crude prices stay elevated, those average numbers could read $3.10 or even $3.15 by the end of the month.
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 modestly peak only slightly beyond last summer’s numbers (which was approximately $3.13 to $3.16 per gallon).
If, though, this war with Iran were to drag on, or to escalate to other countries in the region, crude oil prices could spike, and a number of regions could see gas averages run as high as $3.50, or even $4.00, per gallon, according to The Washington Post.
Bottom Line
Gas prices will increase because of the Iran conflict, most likely hitting $3.00 per gallon by the second week of March. 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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This article originally appeared on GOBankingRates.com: How the War with Iran Could Change Your Gas Prices Right Now — and For Summer
