Gas prices steady amid Baghdad airstrike
Per-gallon cost could rise if conflicts persist, analysts say
The Schork Report publisher Stephen Schork discusses President Trump’s response to Iranian aggression and the impact that it’s having on the oil market.
U.S. gas prices have remained mostly steady following an American airstrike that killed a top Iranian military chief, but costs could pick up if conflicts in the Middle East continue.
As of press time, according to the American Automobile Association, oil futures rose 3.7 percent to $63.44 and the national price of gas hit $2.59, up 3 cents from last week. Gas is produced using crude oil.
Gas prices increased only slightly since Thursday’s Pentagon-ordered strike on a Baghdad airport killed Qasem Soleimani. Some analysts think Iran could potentially retaliate by attacking Middle Eastern oil production sites or restricting oil flow to the region.
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When a series of drone attacks was launched on one of the world’s largest oil processing facilities in Saudi Arabia in September, U.S. gas prices rose by 1.5 percent days after.
Still, with strong oil production in the United States, the impact on fuel from this latest airstrike will likely not last long. Sanctions on Iran that block much of Iran's oil output, outages there aren’t expected to shock prices, Stephen Schork, founder and editor of The Schork Report, said Friday on “Mornings with Maria.”
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“Iran has finally received what it's been asking for, for the past year. In 2019, the country baited the hook numerous times, attacking U.S. drones, attacking oil shipping, mining the Strait of Hormuz, orchestrating the attack on the Saudi Aramco facility. And all of this was left without any sort of military response by the United States or Saudi Arabia,” he said. “Now we do have a response. The calculus has changed. In all the provocations in 2019, we did not get a response in oil because there was no response by the United States.”
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And while oil prices have increased in response to the airstrike, the United States is operating as “more of a natural-gas based economy," Schork said. "So, certainly, it's going to have an effect but not to the degree that you would have expected, say, 10 years ago.”