Gasoline prices have been rising in Colorado for normal seasonal reasons, but could start climbing more quickly if the war in Iran lasts for a while.
Oil prices surged Monday following the weekend’s military strikes on the major oil-producing country by the U.S. and Israel. U.S. oil rose 6.3% to $71.23 per barrel, while the primary global price rose 6.7% to $77.74 per barrel.
If the war lasts for another week, oil might increase to about $100 a barrel, which likely would drive up gas prices nationally for U.S. motorists to about $3.75 or $4 dollars a gallon, said Ramanan Krishnamoorti, a professor and vice president for energy and innovation at the University of Houston in Houston.
But if the attacks on Iran last a month, Krishnamoorti said a barrel of oil could soar to $150 and gas could jump to $5 a gallon. He said the last time oil was at $150 a barrel was in 2008, before The Great Recession and technological advances in drilling unlocked more oil and gas.
Even if the war drags on for a while, Krishnamoorti doesn’t foresee the long gas lines of the 1970s. Arab members of OPEC halted the flow of oil to the U.S. during the Arab-Israeli war in retaliation for U.S. support of Israel.
“We have plenty of production, and we are pretty well self-sufficient, along with Canada and Mexico. We don’t need to import oil from anywhere else, except those two countries,” Krishnamoorti said.
President Donald Trump said Monday the administration had projected the war could take four to five weeks, “but we have the capability to go far longer than that.”
The U.S. produces approximately 14 million barrels of oil a day, Krishnamoorti said. Iran produces 3.5 million to 4 million barrels a day. However, Iran controls part of the Strait of Hormuz in the Persian Gulf, through which 20% of the world’s oil supply passes.
While Americans are unlikely to see long lines at gas stations if war on Iran extends into weeks, they are likely to pay higher prices, he added.
Gas prices in Colorado were ticking up before the strikes on Iran were launched over the weekend, said Skyler McKinley, spokesman for Colorado AAA.
“Folks are going on road trips, spring break is kicking off,” McKinley said.
And metro Denver stations will soon switch to the “summer blend” of gas, reformulated fuel that burns cleaner and releases fewer toxic emissions. Stations in a nine-county region must sell the gas in the summer because the area doesn’t meet federal air quality standards.
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“Will consumers see more expensive gas prices in the coming weeks? Absolutely. That was going to be the case before anything happened in Iran, because it was already the case structurally,” McKinley said.
The average price for gas statewide Monday was $2.88, up 2 cents from Sunday. A month ago, the price was $2.58 a gallon. A year ago, a gallon of gas cost $2.96.
McKinley said gas prices had been lower recently due in part to price wars between new gas stations in the south Denver area.
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