How could the conflict between Israel and Iran affect gas prices in the US?
Israel has vowed to retaliate against Iran for its barrage of missiles on Tuesday. The uncertainty of what that would look like has sent oil prices higher.
The war in Gaza has expanded into Lebanon as more Israeli troops move into the country to attack the Iranian proxy Hezbollah. In response, Iran launched its biggest missile attack yet on Israel, which Prime Minister Benjamin Netanyahu called “a big mistake” vowing to make the Islamic Republic “pay for it.”
These latest events and worries that there could be even more escalation in the ongoing conflict has driven crude oil prices higher. The “significant retaliation” that Israeli officials say will come within a matter of days could include strikes on Iranian oil production according to Axios.
How could the conflict between Israel and Iran affect gas prices in the US?
In one of the scenarios, if Israel were to attack oil facilities in Iran, that could provoke Tehran to hit Saudi oil infrastructure Tamas Varga of oil brokerage PVM told Reuters. Iran took similar measures in 2019, striking crude oil processing facilities in Saudi Arabia. Varga says, that “would irretrievably send oil prices considerably higher.”
However, De Haan of Gas Buddy said that he doesn’t see this as an immediate concern for American drivers filling up at the gas pump. “Will this destabilize the Middle East and will there be more of an impact?” he asked speaking to Schwab Network. “For now, consumers really should not worry about prices spiking, that is not something we foresee happening,” he said.
Currently, the national average is around $3.20 per gallon of regular according to Gas Buddy data. That could rise by between 10 and 15 cents per gallon according to experts who spoke to ABC if there were further escalation of the conflict.
However, while distillate inventories fell last week, stocks of gasoline and crude oil increased. US crude inventories rose to 417 million barrels in the week ended September 27, according to the Energy Information Administration.