Price At The Pump: Middle East Turmoil Continues To Drive Oil

Since the end of February, the war between the United States, Israel and Iran has dictated oil prices, and this week is no different.

Patrick DeHaan with Gasbuddy.com said oil prices moved higher over the weekend when peace talks in Pakistan were unfruitful, and then President Trump announced he would use the Navy to block all ports to Iran.

“That is sending oil upward by about 8% on the risk that it will cause Iran to retaliate in some way, shape, or form," DeHaan said.  "So unfortunately, not much came out of the peace talks, both parties pointing fingers. For now, though, a national average that had fallen in some states may start to move back up.” 

In early Tuesday morning trade, both West Texas and Brent Crude were trading just below the $100 per barrel mark, at $97 and $99 per barrel respectively.

So, what’s the expectation for oil prices and fuel prices.  DeHaan said it’s extremely hard to know at this point.

“Much of it is just completely contingent on developments between the U.S. and Iran on the Strait of Hormuz," DeHaan said.  "We could see prices continuing to head up, but there continues to be escalation. And we could, in theory, see record-setting gasoline and diesel prices. We've already seen some record-setting diesel prices, and that could happen to more states. Or if the situation improves, we could eventually see prices declining, but it's just too impossible to know what may be next in the situation between the U.S. and Iran? Will the Strait of Hormuz blockage be successful in putting pressure on Iran, or will it fail and then lead to further escalations?”

In addition to tensions in the Gulf region, a ceasefire between Russia and Ukraine doesn't appear to be holding.  How is that impacting oil prices, and what does that international community think about the U.S.’s blockade plan?  Find out by listening to our entire conversation with DeHaan:

Remember to join us Tuesday mornings during Northwest Ag Today for your PNW Ag Network Price at the Pump.

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