10/13/23, 2:16 PM Charts show how war in Israel might affect U.S.

prices for gas and oil

Israeli-Palestinian Conflict Add Topic

Will war in Israel affect gas prices? What to know

about costs at the pump going up
Jim Sergent
USA TODAY
Published 4:07 p.m. ET Oct. 10, 2023 Updated 4:04 p.m. ET Oct. 12, 2023

Global oil prices jumped 4% after Hamas attacked Israel on Saturday, but energy analysts say they don't expect the Israel-
Hamas war will significantly drive up oil and gasoline prices.

Even with the oil markets' immediate reaction in Monday's trading, oil prices are down about 6% from the year's peak in late
September and were down slightly Thursday after falling more than 2% on Wednesday, according to Yahoo! Finance. Prices at
the pump have followed a similar downward path in recent weeks, according to AAA.

"As always, a certain amount of short-term speculation takes hold in these situations," John Graves of Graves & Co., an oil
and gas consultancy, said in an email to USA TODAY. "But I think the overall impact on prices at the pump will be muted."

Price of a barrel of oil rises after attack on Israel

Oil prices turned up once markets opened Monday – the first trading day after the attack – but they are nearly back to pre-
attack levels after Thursday trading at 4 p.m. – even as Israeli troops massed along border of Gaza for a possible ground
invasion.

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10/13/23, 2:16 PM Charts show how war in Israel might affect U.S. prices for gas and oil

Gas prices could increase in weeks ahead

Gas prices have been declining since peaking in September when Saudi Arabia and Russia first said they would cut their daily
production by 1 million barrels. At the same time, U.S. refineries' gasoline production had been slowed by record heat in the
South.

With cooler weather and summer driving season over, that decline will likely continue.

"For the foreseeable future – for the next, shall we say, 15 to 40 days – people are going to see gas prices dropping," said Tom
Kloza, global head of energy analysis at Oil Price Information Service. "Longer-term, it's a concern."

Why the Israel-Hamas war impact for now is small

The U.S. is the biggest oil-producing country in the world. It also uses the most oil. In 2022, the U.S. produced 20.3 million
barrels of oil a day while using 19.9 million barrels, according to EIA estimates.

Even though the U.S. produces more than it needs, it's not immune from global shocks. Just last summer, the average price
for regular gas topped $5 in mid-June as Russia, the world's third-largest oil producer, continued its offensive against
Ukraine.

Involvement by more Mideastern countries could drive prices higher

Israel is not a major oil producer, but nearly 30% of the world's oil production occurs in countries just to its east, including
the world's second-largest producer, Saudi Arabia.

Iran, another top producer in the region, has been accused of assisting in the attack. Iranian leader Ayatollah ali Khamenei
denied involvement on Tuesday, blaming Israel for the war and threatening that the Israeli response might provoke his
country.

A ramping up of the conflict in the region is what Graves sees as the longer-term concern for oil and gas prices.

"If the conflict is prolonged, and sanctions tightened, would Iran attempt to put a stranglehold on tanker traffic through the
Strait of Hormuz?" Graves wrote. "All of this would tend to reduce the supply of crude oil longer-term, and as crude prices
rise, it would tend to have an impact on gasoline prices in the U.S."

Contributing: Daniel de Visé

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