Increased oil production, friendly state laws could buffer effects of fluctuating gas prices

TOPEKA, Kan. (WIBW) — The influence of attacks exchanged between the U.S., Israel and Iran is reaching beyond the political sphere as oil and gas markets are showing some reaction to the growing conflict.

At its narrowest point, the Strait of Hormuz is roughly 21 miles across, bordering Oman to the south and Iran to the north.

“And through that narrow passage right by their country, over 20 percent of the world’s oil flows every day,” says Brian Posler, executive director of True Fuel.

Iran’s parliament renewed serious conversations last week about shutting the strait down, raising new concerns as the U.S. and Iran exchange attacks.

“If they’re able to do that then all prices would rise,” says Posler.

He says oil markets have already responded.

“It already spiked eight cents per gallon nationally as of this morning,” Posler says. “And so that could go 10 cents to 25 cents in the next week or so.”

He says rising fuel prices lead to more overall inflation.

“Any product that has to get transported, be it by rail or be it by truck, all of those transportation costs would go up, so that will then affect prices of everything else,” says Posler.

Domestic energy production in the U.S. could buffer any hikes, having exceeded consumption every year since 2019, according to the Federal Energy Information Administration.

“And we’ve improved distribution networks, so the pipelines are better, so all those reasons then help us be a net exporter rather than an importer,” Posler adds.

Kansas’s own regulations will likely dampen any impact, according to Posler.

“Kansas has been a little bit friendlier and so that environment helps us,” he says.

“You know, right now, it’s a little early to predict any sort of large consequence,” says Posler. “I think we’re going to see relatively small changes at the pump and that’s because we’ve done such a good job increasing oil production in this country.”

Leaders of the European Union say that to close the Strait of Hormuz would be dangerous and beneficial to no one.

President Trump is calling for all oil producers to increase their output.

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