Oil prices experienced a brief surge on Friday morning following reports of Israel’s airstrike on Iran, causing Brent Crude to spike almost 2% to just under $88 per barrel. However, prices quickly dropped after Iran’s state media downplayed the strikes, leading to a marginal 0.5% increase in the benchmark to roughly $87.50. The conflict in the Middle East continues to have a significant impact on oil and gasoline prices, with experts warning of potential instability in the oil market due to tensions in the region.
National benchmark West Texas Intermediate also saw a 2% increase following the reports of the airstrike, reaching just over $83.50 per barrel before tapering off. AAA spokesperson Andrew Gross voiced concerns about the impact of international conflict on the oil market, citing the wars in the Middle East and Ukraine as factors that could contribute to volatility. Despite the increase in oil prices, experts believe the effects on gasoline prices may be delayed, and several factors could potentially lead to a decrease from the current national average of $3.69 per gallon.
Gasoline prices may see some relief in the near future, with head petroleum analyst Patrick De Haan predicting prices could reach $3.70 per gallon soon. The return of U.S. oil refineries from maintenance and Iran’s downplaying of the Israeli attack may signal an end to the upward trend in gas prices. Additionally, an increase in crude oil inventories by 2.7 million barrels this week offers a positive sign for gas prices, although inventories remain lower than they were this time last year. As U.S. demand for gasoline typically decreases ahead of Memorial Day, experts expect gas prices to stabilize and potentially decrease in the coming weeks.
The reported airstrikes by Israel on Iran came in the midst of escalating tensions between the two countries, with Iran launching a drone and missile strike on Israel in retaliation for an earlier Israeli airstrike on an Iranian embassy in Syria. Iranian state TV dismissed the Friday strikes as propaganda from Israeli and American media, while Israel has not officially claimed responsibility for the attacks. The ongoing conflict between Iran and Israel has led to concerns about further escalation, with Iranian President Ebrahim Raisi warning of severe retaliation for any invasion by Israel. World leaders have called for both parties to de-escalate the situation to prevent further violence and instability in the region.
Overall, the fluctuating oil and gas prices in response to the conflict in the Middle East highlight the interconnected nature of global energy markets and geopolitics. While the initial surge in oil prices following the reported airstrikes reflected concerns about potential disruption in the region, the subsequent decline suggests a level of uncertainty and volatility in the market. As the situation between Iran and Israel continues to evolve, it remains to be seen how ongoing tensions will impact oil and gasoline prices, and whether efforts to de-escalate the conflict will lead to greater stability in the energy sector.
