The war with Iran comes at a time when prices at the pump are already up 10 cents per gallon on average since the beginning of February due to refineries starting to produce pricier summer-blend gasoline.Â
New York-based energy experts say they are concerned about what the conflict in the Middle East will mean for consumers.
How the war impacts gas prices
The outcome of the war remains uncertain, but the economic impact is already being felt. Oil prices rose about $7 per barrel in early trading on Monday before easing slightly.
Gas prices are still well below the June 2022 average of $5 per gallon. Â
CBS News New York
Every $1 increase in the price per barrel translates to a 2-and-a-half-cent hike per gallon of gas.
“The attack in the Middle East, attack on Iran, the risk of threat to the Strait of Hormuz, this is sort of the mother of all scenarios that would cause oil prices to go through the roof. The Strait of Hormuz is a choke point where Iran can dramatically disrupt oil shipping,” said Jason Bordoff, of the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. “Ships are quite wary of going through that right now and if that extends for any extended period of time, that will really send oil prices up.”
Another concern is Iranian attacks disrupting energy production infrastructure in the region.
War threatens current oil and natural gas surplus
The war comes at a time when experts say oil and natural gas supplies have been robust, with some even calling it a glut.
“Now we’re facing the possibility that that surplus might evaporate quickly and we might wind up back in a kind of oil price shock kind of thing we all think about historically,” said Amy Myers Jaffe, of NYU’s School of Professional Studies.
It’s important to note that gas prices are still well below the June 2022 average of $5 per gallon.
“Just got to roll with it, that’s all”
New Yorkers are concerned about the potential for rising gas prices, but they are also trying to keep things in perspective.
“We’re barely making it now, so we’ll just have to prepare for it to get worse, I guess,” driver Maritza Bati said.
“It’s gonna take some time before the price increase eventually,” Sal Rosa said.
“Just got to roll with it, that’s all. This is historic, what’s happening in the Middle East, and maybe finally we’ll have peace in the Middle East, hopefully,” James Parseghian added.
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