Oil prices jumped on the back of fighting in the Middle East between Israel and Hamas, a reaction that could have implications for the cost of gas at the pump.
West Texas Intermediate, which tracks oil that comes from American sources, was up more than 4 percent as of 11:02 a.m ET from Friday, according to Bloomberg data. Brent crude, a benchmark for global oil prices, jumped nearly 4 percent.
A surprise Hamas attack on Saturday killed more than 700 people in Israel, according to the Associated Press. Strikes against Gaza that followed the unprecedented incursion killed nearly 500 people in the Gaza Strip, still according to AP.
Part of the reason that oil prices have spiked may be due to fears that the conflict between Israel and Hamas could broaden to include Iran. The Wall Street Journal reported on Sunday that Iranian officials had helped Hamas plan the attack on Israel. But Secretary of State Antony Blinken said on Sunday that there was no direct evidence that Tehran was involved in the attack.
“In this moment, we don’t have anything that shows us that Iran was directly involved in this attack, in planning it or in carrying it out, but that’s something we’re looking at very carefully,” Blinken told NBC‘s Meet the Press on Sunday.
Some analysts said on Monday that if Iran is sucked into the conflict, and is hit with new sanctions that curtail even further its oil exports, prices could hike, hitting the cost of gas as a result.
Americans have been struggling with a high cost of living, principally due to high inflation. A jump in oil prices and its subsequent impact on the cost of gas would squeeze their pocketbooks further.
“In terms of Iran’s involvement, it only complicates this, given the fact that their oil output is up about 55 percent since the lows of 2020,” Kristen Bitterly Michell, head of Citi Global Wealth Investments for North America, told Bloomberg. “The key to understanding whether this would have broader implications, it’s clearly the scope of the regional conflict and then the pressures it would put in areas like the oil market.”
An expanded conflict involving Iran could also affect supply of oil as well, according to experts.
“If the conflict envelops Iran…up to 3 percent of global oil supply is at risk. And if a wider conflict eventuates that ends up impacting transit through the Strait of Hormuz, around 20 percent of global oil supply could be held hostage,” energy analyst Saul Kavonic told Reuters.
The Strait of Hormuz, which separates Iran, to the north, from the Arabic Peninsula, to the south, has often been the scene of tensions. In July, the U.S. Navy said Iran had attempted to seize two oil tankers sailing through the strait.
Newsweek reached out to the U.S. Department of Energy for comment via email.