The Center Square) – U.S. consumers could soon see higher prices at the gas pump even as Iran looks to de-escalate its military conflict with Israel.
Israel launched preemptive airstrikes in the heart of Iran last week and attacks have continued. Oil prices jumped 8% on the news last Thursday and remain elevated. That could quickly translate into higher prices for U.S. motorists, said Patrick DeHaan, head of petroleum analysis at GasBuddy, which provides retail fuel pricing data.
“There’s still an increased cost that many stations have been paying as they resupply their underground storage tanks,” he told The Center Square. “So we likely still will see U.S. retail gas prices rising this week as stations pass along those increases.”
Trump said Monday that Iran wants to talk amid signs of de-escalation in the conflict.
A quick resolution could defuse rising gas prices.
“The recent potential de-escalation may limit those increases,” DeHaan said.
Israel’s destructive attacks on Iran’s nuclear sites weakened the nation. Israeli attacks also killed Iranian military leaders.
Moving forward, it’s possible that by the by the upcoming weekend, gas prices, after going up, may start to recede, but it’s obviously a pretty volatile situation,” DeHaan said. “I would hope that with today oil declining, it will limit the amount of increases that we’ll be seeing at the pump for the first half of this week.”
Some states may see gas prices spike faster than others, but the increases are likely to affect prices across the nation.
“We tend to see more pricing volatility, more sudden shifts in gas prices in areas like the Great Lakes, Michigan, Indiana, Ohio, as well as some markets like Texas and Florida, where gas prices tend to be a bit more fast-moving,” he said. “But everyone should see similar increases. Some folks may just seen them sooner than other regions.”
The average price for a gallon of gasoline in the U.S. stood at $3.14 on Monday, according to AAA.
GasBuddy noted that nation’s average price of gasoline increased for the first time since May, climbing 1.1 cents compared to a week ago. GasBuddy said the U.S. average stands at $3.08 per gallon. The national average is down 9.5 cents from a month ago and is 32.7 cents per gallon lower than a year ago, according to the company. The states with the lowest average prices were Mississippi ($2.64), Tennessee ($2.66), and Oklahoma ($2.68); the states with the highest average prices were California ($4.57), Hawaii ($4.44), and Washington ($4.31).
Fear tends to be a powerful motivator when it comes to gas prices, DeHaan said. That, along with a host of other complex factors, mean gas prices tend to rise more quickly than they fall, he added.
“Retail prices probably do move up a little faster than they go down, but a lot of the time, gas stations, often don’t fully raise their price as quickly as their own cost goes up and that also then causes them to lower prices at a slower rate,” he said.
Consumers can expect higher prices to last at least as long as the conflict between Israel and Iran.
“The impact to oil and gas prices will last as long as the conflict does,” DeHaan said. “Once the conflict shows the potential to die down or resolve, then we likely will start to see the impacts at the pumps start to fade away.”
