Oil prices, which surged after Israel attacked Iran early Friday, could stay high as long as tensions are elevated in the Middle East.
Higher oil prices could eventually lead to more expensive gasoline and diesel, hurting consumers and businesses and throw a wrench into the Trump administration’s goal of lowering energy costs to keep inflation in check.
The benchmark U.S. crude oil price was about $72 a barrel late Friday morning in the United States, up about 6 percent. Prices briefly topped $77 a barrel shortly after the attack began.
Where oil prices go from here depends on how Iran responds to the Israeli attacks, analysts said. Prices could climb further if Iran attacks energy infrastructure or U.S. bases in the region. But if it retaliates in a more limited fashion, oil prices most likely would fall in the coming weeks.
Either way, U.S. oil companies and big producers in the Middle East like Saudi Arabia are not likely to ramp up production quickly, said Robert McNally, who is president of the Washington research firm Rapidan Energy Group and was an energy adviser to President George W. Bush.
Producers know that although geopolitical conflicts often drive up prices in the short-term, which is good for them, the fighting can ultimately lead to recessions, which pushes oil demand down, Mr. McNally said. Saudi Arabia and other members of the oil cartel known as OPEC Plus will also not want to be seen as supporting or benefiting from Israel’s attack.
“They’re going to hunker down, stay low and hope it blows over,” Mr. McNally said of OPEC Plus.
Iran produces around 3 percent of the world’s oil but could disrupt far more of it. That is partly because the country sits on the northern side of the Strait of Hormuz, a key shipping route that connects the Persian Gulf and the Gulf of Oman.
Around a fifth of the world’s oil and related fuels moves through the strait every day. And while it would be difficult for Iran to close that waterway for a long time, it could disrupt traffic, RBC Capital Markets analysts wrote on Friday.
In past periods of heightened political tensions, Iran has seized tankers or interfered with their GPS signals, making it more difficult to navigate the waterway, according to Rystad Energy, a research and consulting firm.
President Trump is especially sensitive to the cost of oil and was lamenting a recent, more modest price increase before Israel attacked Iran.
“I don’t like that the oil prices have gone up just a little bit over the last few days,” Mr. Trump said at a White House event on Thursday.
He chided the energy secretary, Chris Wright, who was in the audience: “I was going to call and just really start screaming at you. Are we OK? Nothing wrong, right? It’s going to keep going down a little bit, right? Because we have inflation under control perfectly.”
Oil prices remain moderate by historical standards. U.S. oil prices have averaged above $76 a barrel in each of the last three years, according to the Energy Information Administration.
In the United States, gasoline is about 9 percent cheaper than it was this time last year, according to the AAA motor club. A gallon of regular costs $3.13 on average.
Other energy costs are rising, however, including for electricity to power people’s homes. Several studies have found that Mr. Trump’s big domestic policy bill, as it was passed by the House last month, would make things worse.
Should oil get “caught in the crossfire,” RBC analysts wrote, Mr. Trump would most likely ask Saudi Arabia and others to pump more to insulate U.S. consumers from the effects of the conflict.
Rebecca F. Elliott covers energy for The Times with a focus on how the industry is changing in the push to curb climate-warming emissions.
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