Oil prices have jumped higher after a US strike killed Qasem Soleimani, a top Iranian commander, raising tensions in the Middle East. But gasoline prices have barely budged for drivers in the United States.
The average pump price Monday stood at $2.58 a gallon for regular, according to AAA, essentially unchanged from a week ago.
That may not last: Wholesale gasoline prices have been moving higher in markets, up about 5 to 7 cents a gallon since the attack Thursday.
And those prices may have room to rise if the tensions escalate or spill over into other countries in the Middle East. Crude oil prices, while higher, haven’t spiked as much as they could if Saudi Arabia or even Iraq were to have their shipments disrupted, noted Tom Kloza, chief oil analyst with the Oil Price Information Service, which tracks gasoline prices for AAA
“Iran is not exporting much oil. They’ll sneak out 200,000 to 300,000 barrels here and there. Essentially they’re exporting nothing. The sanctions have worked.”
He said the price increases in crude, and more modestly in wholesale gasoline prices is investors betting that further disruptions to global oil shipments may follow.
But a rise in gas prices isn’t guaranteed. Even if wholesale prices stay at their current level or climb higher, pump prices may not follow, said Kloza. That’s because of seasonal factors putting downward pressure on pump prices.
“This month, and perhaps this week, it is the nadir for gasoline demand,” said Kloza. “It’s very difficult to get any price increase. If you’re a gasoline retailer or distributor, these kind of increases in wholesale prices really squeeze you.”