Petroleum plays key role in economic changes during Middle East conflict
TYLER, Texas (KETK) — An economics expert states that petroleum is a major factor in possible price changes amid the conflict between the United States and Iran.
Texas gas prices are pushing wallets to their breaking point as impactful changes occur in the oil market.
“Oil is a globally traded commodity and when you have a disruption in the supply or even the possibility of a disruption in supply that can have a domino effect that reaches us even here in Texas, AAA Texas Spokesperson Daniel Armbruster said.
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One key ingredient in gasoline is petroleum, which can also help produce everyday items at your local store.
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“We all talk about gasoline all the time, but it’s used in jet fuel, it’s used in diesel, it’s used in plastic, paints, some pharmaceuticals, cosmetics, so petroleum is used throughout the economy,” Ray Perryman, President of the Perryman Group, said. “I mean, the list goes on and on and on, so obviously if this is a prolonged situation, you will start to see the price effects on all those things.”
A shift in the amount of tradeable petroleum could hinge on how long the conflict lasts in Iran.
“If the region stays in turmoil for a while and these disruptions continue and more infrastructure gets destroyed, then you would have a more permanent type of effect,” Perryman said.
While food and medicine costs stay in the normal range, East Texans may need to set aside more money as the war continues.
“Food is one area in effect, obviously not as much as gasoline, but if it persists for a long time and really disrupts the supply chain, it can impact food prices as well, Perryman said.
Time will tell how prices will fluctuate in the coming weeks.
On Monday, the Associated Press reported that oil prices dropped from $120 to $80 a barrel, proving just how unpredictable our economy can be.
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