Motorists in Virginia, as well as drivers across the United States, could see higher gas prices due in large part to the re-imposition of economic sanctions on Iran by President Trump yesterday, warns AAA Mid-Atlantic. By summer, Americans could see the national average price of a gallon of regular unleaded gasoline ranging from $2.80 to $3.00 this summer.
Gas prices increases resulting from the sanctions, however, may not be immediate. It can takes weeks, usually month(s), for the market increase to translate over to retail prices. The retail increase will be dependent on how expensive crude oil price goes and the duration at which crude sells at the higher price point in the market.
Increases would be on top of already high prices. The current national average price for a gallon of self-serve regular gasoline is at its highest since 2014.
“Though anticipated, the White House’s decision brings a wide variety of global and domestic impacts,” said Martha Mitchell Meade, AAA Mid-Atlantic’s Manager of Public and Government Affairs.” In the United States, one of the largest potential impacts could be increased crude oil prices due to reinstated sanctions on Iran. In turn, this could lead to increased gas prices this summer.”
Prior to Trump’s announcement, gas prices were expect to continue to rise until around Memorial Day, but the sanctions could mean that gas prices will continue climbing deep into the summer driving season. “This is a scenario of pump prices possibly going from bad to worse” added Meade. “The timing, just as we head into the busy summer driving season, is not ideal.”
The retail increase will be dependent on how expensive crude oil price goes and the duration at which crude sells at the higher price point in the market. If in the end crude oil remains at $68-$70 per barrel, prices will not be that much more expensive this summer than they are now. If crude sells for over $70 per barrel for an extended amount of time, the national average could hit $3/gallon this summer.
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Chris Graham
