What The Conflict In Iran Means For Gas Prices This Summer

History shows that turmoil in the Middle East usually means a stateside spike in gas prices. But even with the US and Israel launching strikes against Iran, experts believe there’s no reason to turn your car around this summer.

The average cost for a gallon of regular gas is currently $3.21—that’s ~23 cents cheaper than it was a year ago, according to the US Energy Information Administration. In fact, oil prices are lower now than when the Israel-Iran conflict began on June 10, and they may hold steady for awhile:

• Unlike in similar situations that led to more expensive gas, the US has produced much more oil since the shale revolution of the early 2010s, creating an abundance that should prevent pain at the pump.
• The Persian Gulf region is also less willing than it used to be to withhold its oil to spite the US for its support of Israel, per the Washington Post.

The role of the Strait of Hormuz

Of course, this can all change in an instant if the tenuous ceasefire is broken, or if there’s a disruption in the body of water that everyone suddenly became an expert on two weeks ago—the Strait of Hormuz.

The US imports just 7% of its oil through the strait, but 20% of the world’s oil passes through the choke point controlled by Iran. A shutdown could throw global markets into chaos and send gas prices soaring.

So far, so good: Bloomberg reported that the number of oil tankers leaving the Persian Gulf doubled from Monday to Tuesday this week. And this week’s seven-day rolling average for traffic through the strait is on par with the average for the rest of the month.

Bottom line: Patrick De Haan, head of petroleum analysis at GasBuddy, told the Wall Street Journal that he expects gas prices to hold between $3 and $3.20 this summer.—DL