With the Strait of Hormuz closed, much of the world’s oil supply has been cut off.
SAN ANTONIO — The big question on a lot of our minds what does the situation in Iran mean for gas prices? Right now the national average is $3.19 a gallon. Here in Texas we’re paying $2.81. With the end of the Iran conflict nowhere in sight, already rising gas prices are expected to go even higher.
A lot of oil goes through the middle East before it gets to Texas. Gas prices are forecast to rise as oil prices rise, which is typical. But with so much uncertainty worldwide, how high a gallon could go is up in the air.
Prof. Jon Taylor from UTSA’s political science department told us, “There’s not been this massive spike, but there has been a spike and a concern about what that will mean at the gas pump, the answer is, is that gas prices will likely go up.”
We are watching the price of crude oil. It is a main ingredient in the gasoline we use in cars, jet fuel, and diesel. About 20% of the whole world’s oil supply is transported through a narrow waterway next to Iran.
It’s called The Strait of Hormuz.
Because of the attacks and the potential for retaliation some shipping companies are reassessing routes amid safety concerns. But there are limited alternative for shipping oil out of that region.
Prof. Taylor added, “If the Strait of Hormuz is shut down and the Iranians claim they have control of it and therefore are shutting basically complete control of the Strait of Hormuz, it means that the oil terminals that are within the Persian Gulf basically cannot be accessible, and those tankers can’t get out.”
That means hiked up oil prices and more expensive gasoline too.
If you are looking for cheap gas check out GasBuddy. You can use your zip code to try to find inexpensive gas, near you.
So when will the conflict end and gas prices do a reversal?
Professor Taylor had some bad news and told us, “Based on what we’re seeing, based on what the Trump administration is saying, based on what the Iranian government is saying, this could go on indefinitely.”