Rising Middle East tensions could drive U.S. gas prices higher
(CNN)-As tensions escalate between Israel and Iran, Americans may soon feel the impact at the gas pump. According to analysts, the rising conflict is sending oil prices soaring, and that could lead to a spike of more than 30 cents per gallon in U.S. gas prices by the Fourth of July. “Any kind of conflict going on in the Middle East, or particularly if it escalates, is going to lead to rising oil prices, which will lead to inflationary pressures in the U.S.,” said Natasha Lindstaedt, a Professor of Government at the University of Essex.
Damage to key oil infrastructure has been reported amid ongoing strikes between the two nations. In Israel, video from Haifa — home to the country’s largest oil refinery — shows some of the potential damage. Meanwhile, Iran, one of the world’s top oil producers, has also seen its oil and gas facilities targeted.
“They went after oil storage and oil refineries in those depots, as well as the targeting of gas facilities in Iran’s south,” explained Behnam Ben Taleblu, a senior director at the Foundation for Defense of Democracies.
Despite the current concerns, analysts point out that U.S. gas prices were relatively mild before the conflict. Rystad Energy suggests that the market’s reaction could be “contained and temporary” — unless Iran targets the Strait of Hormuz, a critical shipping lane. Goldman Sachs warns that a prolonged disruption in that region could push oil prices above $100 a barrel. “Every single day, 21 million barrels of oil flow through the Strait of Hormuz. It’s about a fifth of what the world consumes,” noted CNN business reporter Matt Egan.
