BAKERSFIELD, Calif, (KBAK/KBFX) Drivers watching gas prices closely may not see immediate relief at the pump, even as a two-week ceasefire between the U.S. and Iran eases tensions that have rattled global energy markets.
The pause in fighting has raised a key question: Will easing tensions translate into lower fuel prices?
Analysts caution that a temporary truce may not be enough to bring prices down, at least not right away, and that if fighting resumes, fuel prices could spike again
Ceasefire lasts two weeks, but analysts warn gas prices may not drop immediately (Photo by Andrew Harnik/Getty Images)
“I foresee seven-dollar gasoline. In California we’re already seeing it in some counties,” said Stuart Heisler, vice president at Anacapa Engineering.
President Donald Trump said he expects prices to fall.
“Everything will be nice, and I think your oil price will go down to lower than what it was before, and I think a lot of good things will happen,” Trump said.
Heisler said uncertainty about whether the ceasefire will hold is part of what keeps markets and prices on edge.
“You know with as fast as we change our mind in Washington, I don’t think anyone trusts that this ceasefire will last in an appreciable amount of time,” he said.
Ceasefire lasts two weeks, but analysts warn gas prices may not drop immediately (Photo by Getty Images/Getty Images)
Heisler also said California is needing to find ways to import 20% of its oil.
“And the last ships that left before the war started have already been to the port and they’ve unloaded, so we’re short in California twenty percent of our crude. We’re having to make it up by importing more gasoline and importing crude from other places,” he said.
As for why oil being drilled in Kern County is not making much of a difference at the gas pump, Heisler said new drilling permits will take time to translate into production and, eventually, prices.
Ceasefire lasts two weeks, but analysts warn gas prices may not drop immediately (KBAK/KBFX)
“You will see those wells start to get drilled in the summer and starting to produce in the fall,” he said.