Oil prices briefly surged Tuesday night while Iran was bombing U.S. air bases in Iraq, spiking 4% to $65 for a brief time. But the market gave up most of those gains and dropped back to 1.3% later in the evening.
A slight increase had been predicted in the days before the attack as tensions in the Middle East rose. A Gas Buddy app spokesman predicts a 5 to 10 cent increase in the coming days.
Any further escalation between the U.S. and Iran could still affect the market and result in a true spike in gas prices.
One reason why the conflict has not yet lead to a significant increase in gas prices is that the world has been flooded with new sources of oil in recent years, particularly from the U.S.
What’s more, Iran is subject to severe sanctions and is unable to export its oil to much of the world, which limits the country’s impact on the petroleum markets. What traders mostly fear is the possibility that Iran will move to block oil supply routes or attack oil infrastructure in other countries.
For now, though, the increase in gas prices tied to the Iran situation is “a blip on the radar compared with Hurricane Harvey and Hurricane Katrina,” both of which caused national spikes at the pump, DeHaan said.