Israel-Iran conflict expected to hike US gas prices, experts say. Here's how much.
U.S. oil prices hovered near a five-month high on Wednesday as President Donald Trump weighed direct involvement in support of Israeli strikes on Iran, making it all but certain that gasoline prices would rise for Americans within days, industry analysts told ABC News.
The U.S. West Texas Intermediate futures price -- a key measure of U.S. oil prices -- has surged more than 20% in June as tensions between Iran and Israel have boiled over into an exchange of missile strikes.
The back-and-forth strikes stoked concern among investors about a possible wider conflict across the Middle East, which accounts for a large share of global oil production.
The jump in oil prices threatens to raise the price of gasoline for U.S. drivers ahead of a busy travel period over the 4th of July holiday.
If oil prices remain at elevated levels, gasoline prices will likely rise modestly over the coming weeks, experts said. A much more severe price spike could result, however, in the event of an escalation that ensnares nearby oil-shipping routes or draws in neighboring countries, they added.
The national average price of a gallon of gas stands at $3.19 per gallon, which marks a 7 cent increase over the past week, Patrick de Haan, the head of petroleum analysis at GasBuddy, said on Wednesday in a post on X.
Gas prices have climbed in 49 of 50 U.S. states over the past week, with the exception of California, which experienced price relief due in part to the resolution of issues facing some of its refineries, de Haan said.
The average national price of a gallon of gas will likely climb as high as $3.40, which would amount to an additional 6% increase, de Haan said.
Such a price increase could prove short-lived, Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, said last week in a note to investors.
Joswick pointed to tit-for-tat strikes between Israel and Iran last October, which caused oil prices to spike before a cooldown when both sides opted against escalation.
"When Iran-Israel exchanged attacks last time, prices spiked, then fell once clear, not escalating and had no impact on oil supply," Joswick said.
Aerial attacks between Israel and Iran continued overnight into Wednesday, marking a sixth day of strikes following Israel's Friday attack. That surprise operation hit at the heart of Iran's nuclear program, striking key facilities and killing several nuclear scientists as well as high-ranking military leaders, according to Israeli officials.
The U.S. did not provide any military assistance or have any involvement in Israel's Friday strike, a U.S. official told ABC News. President Donald Trump told ABC News on Sunday, "It's possible we could get involved."
A further escalation of the conflict between Israel and Iran could send oil and gas prices significantly higher, said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston.
While sanctions have constrained Iranian oil output in recent years, the nation accounts for about 3% of global oil output, Krishnamoorti said. Iran also asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 20% of global oil supply.
Oil prices could surge from a current level of about $73 per barrel up to $120 per barrel if the Israel-Iran conflict damages Iranian oil infrastructure or impedes the passage of some oil tankers in the Strait of Hormuz, Krishnamoorti said.
That scenario would amount to a more than 60% surge in oil prices, Krishnamoorti added, resulting in a proportionate hike for gas prices. The average price of a gallon of gas would climb above $5.
"If we see any throttling back of the Strait of Hormuz, we'll see a massive increase in the price of oil, and that will impact everything in the U.S.," Krishnamoorti said.
That forecast of a potential price spike for oil matched a prediction from asset management firm Lazard, which warned on Friday of a possible escalation involving "strikes on Gulf energy installations or attempts to temporarily close the Strait of Hormuz."
Such a scenario would trigger "price increases upwards of $120 per barrel," Lazard said in a memo to investors.
The ultimate outcome remains unclear, Krishnamoorti said, noting the scale of price increases would depend on the extent of escalation.
"We may have just seen the tip of the iceberg in terms of price hikes," Krishnamoorti said.
But, he added, "If oil prices continue at this level, it'll be a small bump for gasoline."
ABC News' Riley Hoffman, Leah Sarnoff, Jack Moore, Jon Haworth, and Nadine El-Bawab contributed to this report.
