Middle East conflict causing higher fuel prices

Oil prices surged Friday, which could contribute to higher prices at the pump

From AAA

Drivers could see gas prices rise as tensions grow in the Middle East. The situation has already led to higher crude oil prices, which typically raises the cost of producing gasoline.

Florida gas prices climbed an average of 7 cents per gallon in the past three days. That increase was set into motion before the US airstrikes last week, by crude price hikes that occurred in December.

Once news broke that the US carried out attacks on Iran, crude prices surged nearly $2 per barrel on Friday. An increase of that magnitude can directly trigger a 5 cent hike at the pump. The US benchmark for crude (WTI) eventually settled at $63.05 per barrel - the highest daily settlement since May 2019. It's worth reporting that some of this increase was influenced by another week of lower US crude inventories, but the situation in the Middle East was the top story.

"What happens in the Middle East can have a direct impact on Americans' daily lives, by influencing what they pay at the pump," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Many people don't realize that half of what they pay for every gallon of gasoline is determined by the price of oil. Even though the US is producing oil at a record pace, that oil is bought and sold on the stock market, which is heavily influenced by global supply and demand. Crude prices rise when there's a threat of war, because of concerns over how the conflict could hamper supply and demand.

"It's still far too early to know how much of an impact this conflict will have overall on prices at the pump," Jenkins continued. "We'll likely have a better idea early this week. Some analysts are anticipating a 'Manic Monday' on the stock market, with many financial and physical traders returning from vacation. Either way, volatility should be expected with both oil and gasoline through January, at the very least. If geopolitical tensions continue to escalate, crude prices may rise and drag gasoline along for the ride."

Florida drivers are currently paying the highest prices for gasoline since early December. The state average of $2.53 is 30 cents per gallon more than this time last year. The reason for this disparity can be found in the price of oil, which is currently $20 per barrel more than it was in January 2019.

As a result, gas prices are off to their most expensive start to a new year since 2014.

Regional Prices

Most expensive metro markets – West Palm Beach-Boca Raton ($2.63), Pensacola ($2.56), Port St. Lucie ($2.56)

Least expensive metro markets – Jacksonville ($2.49), Orlando ($2.50), Fort Myers-Cape Coral ($2.50)

Find Florida Gas Prices

Daily gas price averages can be found at Gasprices.aaa.com

State and metro averages can be found here