Trump's Iran War Is Already Pushing Gas Prices Higher

American and Israeli attacks and Iranian retaliatory strikes have led to a sharp increase in oil prices, disrupting global energy supply chains. The disruption will ripple outwards, as the price of US-made West Texas Intermediate sweet crude oil rose 8.6 percent to $72.79 a barrel Monday morning, from approximately $67 on Friday. Ultimately, said a Gulf Oil advisor to CNN, it will lead to rising gas prices for Americans. Tom Kloza, also an independent analyst, said he expects retail gas prices to rise "5 to 10 cents a day" for "a little while."

“Yesterday, I got a call early in the morning, and there were a number of companies that were raising their wholesale prices for gasoline by 25 cents (a gallon),” Kloza said to CNN on Sunday, March 1. “Clearly, there’s clearly a whiff of panic there. (Wholesalers) are afraid that they’re going to get hit with massive price increases.”

Price increases this time of year can be expected, largely due to seasonal demand, but the peak is generally in mid-April. America's renewed war with Iran has accelerated these increases, with prices at gas pumps rising already. “Where do we stop? Prior to Friday night, I would have said that we would stop at $3.25,” Kloza said. “Now it’s a little bit open ended.” However, Kolza stops short of predicting record prices. Global supplies are, ideally, high enough to stop that from happening.

Tension in Hormuz and infrastructure attacks could exacerbate oil prices

One of the most crucial factors in the severity of price increases will be determined in the Strait of Hormuz, the channel off Iran's southern coast that sees around 20% of global oil supply. According to Iranian state media, Iran’s Revolutionary Guard Corps (IRGC) has said the Strait of Hormuz is closed, and stated any vessel attempting to pass will be attacked. “The strait is closed. If anyone tries to pass, the heroes of the Revolutionary Guard and the regular navy will set those ships ablaze,” Ebrahim Jabari, a senior adviser to the IRGC’s commander-in-chief, said on March 2. Jabari also threatened to attack oil pipelines in a post on the IRGC's Telegram.

On another front, attacks on existing oil infrastructure could quickly push prices upwards. Already, Iranian drones hit a refinery in Saudi Arabia. While the US and parts of Europe have sanctioned Iranian crude for years, the effects of tightening supply will eventually reach American shores. China is Iran's largest buyer, but if China must buy oil elsewhere, possibly once reserves begin to deplete following the continued closure of the Strait of Hormuz, prices will rise globally as the nation begins to seek crude from other sources.