Rising tensions with Iran could push prices higher at the pump.
After President Donald Trump hinted at potential U.S. military strikes in the region, oil markets began to fluctuate, raising the risk gas prices could jump.
Increases like that tend to hit transportation costs first and then can show up in delivery, grocery and travel expenses. Here’s how that kind of move can affect everyday spending and what households can watch for next.
Global Exposure
Iran sits near one of the world’s most important oil shipping routes, with much of the global crude supply moving through the Strait of Hormuz.
A closure or military action there could disrupt 14 million barrels per day, a gap other producers could not quickly replace, and a broader U.S.-Iran conflict could reach refineries, pipelines and export terminals across the region.
U.S. gasoline prices follow global crude costs, so instability there could raise prices at the pump even if local fuel supplies have not changed.
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Rapid Price Moves
Energy markets move on credible risk, not just confirmed shortages.
A Center for Strategic & International Studies analysis outlined escalation scenarios ranging from interference with tanker traffic to direct strikes on regional oil facilities, developments that could restrict shipments and tighten global supply.
When traders price in that risk, wholesale fuel costs rise. “Gas prices are based on the costs that the gas station must pay to purchase their next shipment of gasoline,” said Wayne Winegarden, an economist at the Pacific Research Institute. “These costs reflect the now higher oil prices, which is why prices rise when oil prices rise.”
Household Impact
A sudden increase of gas prices shows up first at the pump, raising the cost of routine commuting and errands.
Businesses that rely on transportation can then pass along higher fuel expenses through delivery and service fees.
“Higher gas prices increase transportation costs, which raises the price for groceries,” Winegarden said. “They can also increase production costs, which puts additional upward pressure on prices.”
What Happens Next?
“President Trump faces a dilemma in how to confront Iran without incurring an unwanted oil supply disruption and gasoline price spike,” per the Center for Strategic & International Studies.
According to CNBC, oil prices have already risen by about 6% this week. Much of what happens with oil and gas prices next will depend on how the situation plays out.
What To Do Now
Short-term spikes are often driven by uncertainty, so rushing to buy large amounts of fuel rarely avoids higher costs. Filling up during regular routines can reduce the risk of paying peak prices without overreacting to market swings.
Watching prices over several days may help identify stabilization after an initial jump. Larger spending decisions tied to fuel, such as booking travel, may benefit from waiting until markets settle.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Gas Prices Could Jump Within Days If Trump Moves on Iran
