Iran Tensions Could Mean $5 Gas

Recent posturing has already sent price up 20%
By Kevin Spak,  Newser Staff
Posted Mar 1, 2012 8:57 AM CST
Gas prices over four and five dollars are posted on a Shell station on Olympic Boulevard on February 23, 2012 in Los Angeles, California.   (Getty Images)

(Newser) – Going to war with Iran would be an expensive proposition for America's drivers. Tensions over the country's nuclear ambitions have already pushed crude oil prices up 20% to a record winter high, energy experts tell the New York Times. That's translated to an average $3.73 per gallon at pumps nationwide, with prices well over $4 in California. Summer usually pushes prices around 20 cents higher, but tensions with Iran could tack on an extra 50 cents or more.

"If we get some kind of explosion—like an Israeli attack or some local Iranian revolutionary guard … attacks a tanker—then we’d see oil prices push up 20% to 25%," one energy researcher says. That could cut into US purchasing power; one economist says that if gas prices rose a full dollar, it would suck $100 billion out of the economy. The bright side: If tensions ease, crude could fall as low as $80 a barrel. "It's a bind for Obama," says another market watcher. "How do you get tough on Iran without getting tough on American wallets?" (Read more Iran stories.)

My Take on This Story
Show results without voting  |