Iran Attacks to Add Pressure to Pump Prices

By The News Service of Florida

Gas prices in Florida on Monday were little changed from the start of the weekend.

But the statewide $2.88 average reported Monday by the auto club AAA is projected to spike in the coming days, as the U.S. and Israel launched coordinated attacks on Iranian targets over the weekend.

The size and duration of any uptick will depend in part on how long the military operations last, which could affect not just Iran’s production but the flow of shipments through the Strait of Hormuz and the insurance cost to ship operators, according to Patrick De Haan, head of petroleum analysis at GasBuddy.

Even with the Organization of Petroleum Exporting Countries potentially providing a “supply cushion,” De Haan cautioned that the attacks could cause crude prices to rise 5- to 10-percent, which will eventually settle into increases at the pump.

“For most states, increases will likely be measured in pennies per day, not dramatic overnight spikes,” De Haan wrote.

AAA put the national average at $3 on Monday, six cents higher than a week earlier.

The national average hasn’t been at $3 since December 2, the last time Florida’s average was also at that mark.

De Haan projected the national average to be around $3.10 to $3.15 per gallon within two weeks, and $3.20-$3.25 within three weeks.

De Haan added that states such as Florida that are prone to price cycling — where competing gas stations swing between artificially low prices against competitors and brief spikes to recoup lost revenue — “could see larger jumps this week” if the per barrel price jumps by $5 to $10.