Oil prices surged Sunday evening to the highest levels since President Donald Trump returned to office as energy markets digested the U.S. military strike on Iran's nuclear facilities — and the risk that Tehran may try to disrupt the flow of crude oil out of the Middle East.
U.S. crude oil futures rallied more than 6 percent to peak at $78 a barrel, more than $1 higher than the price on Jan. 20 when Trump was inaugurated. That jump is likely to filter through to gasoline prices just as drivers prepare to hit the road for the long July 4th weekend next week.
"Should oil exports through the Strait of Hormuz be affected, we could easily see $100 oil," said Andy Lipow, president of Lipow Oil Associates.
Following the outbreak of the Israel-Iran war, JPMorgan analysts forecast that under a "severe outcome," a closure of the Strait of Hormuz could push oil prices to $120–$130 per barrel.
If crude climbs into that range, analysts predict gasoline and diesel prices could rise by as much as $1.25 per gallon.
“Consumers would be looking at a national average gasoline price of around $4.50 per gallon—closer to $6.00 if you’re in California,” Lipow said.
Leave a comment: