There is a possibility that the recent attack on Israel by Iran could have an effect on gas prices for US consumers.
However, it is important to note that this attempted strike does not necessarily mean that oil prices will increase.
Oil Price Hike Expected Amid Iran's Attack on Israel
The Israeli military has successfully intercepted and neutralized over 300 missiles and drones, with the support of their allies including the US. This incident marks an important moment as it is the first time that Iran has initiated an attack on Israel from its territory.
In the wake of the recent Israeli missile attack that resulted in the deaths of Iranian military commanders in Syria, the strike took place.
Iran, a major player in the global crude oil market, has been involved in a covert conflict with Israel for some time. However, there are worries that the ongoing Israel-Hamas war could escalate into a larger regional crisis.
According to CNBC, US crude oil futures experienced a minor decline on Sunday as traders found some relief following Israel's successful defense against a significant air assault by Iran.
Additionally, the US made it clear that it aims to prevent a broader conflict in the Middle East. The West Texas Intermediate contract for May dropped 34 cents to $85.32 a barrel as trading commenced Sunday evening.
The price of June Brent futures dipped slightly to $90.18 per barrel. The price of US crude ended the week at $85.66 per barrel, while the global benchmark settled at $90.45. The price of WTI futures started the year at approximately $71 per barrel.
How Iran's Missile, Drone Attack on Israel Affects Global Gas Prices?
According to Michael Walden, Reynolds Distinguished Professor Emeritus at North Carolina State University, the potential impact on gas prices will be determined by the actions of the countries involved and whether they choose to escalate the conflict further.
"If Israel does not respond and if Iran did this as a show of force primarily to its citizens and there's no recurrence, I think the impact will be very, very miniscule," he said.
Walden mentioned that there could be a wide range of possibilities to consider. Israel can carry out precise strikes that steer clear of oil refineries, for instance, while still generating global uncertainty.
"That would likely raise concerns about the potential consequences, resulting in a moderate increase in oil prices, although not as significant as in the case of a full fledged attack," he stated.
If Iran and Israel continue to clash, US motorists will likely experience an immediate impact on gas prices.
According to Patrick De Haan, the head of petroleum analysis at GasBuddy, Israel might not have a significant reaction to Iran's attack, mainly due to its lack of success. "So, where we stand now is I don't think oil prices are going to be significantly moved by this," he said, according to USA Today.
Join the Conversation