As bombs fall in Middle East, NJ drivers will start to feel pain here

The military conflict between Iran and Israel has started pushing up the price of gas.

AAA’s gas survey of New Jersey prices shows an increase of seven cents in the past week. Patrick De Haan, head of petroleum analysis at GasBuddy, believes that prices could go higher as tensions continue.

"Concerns over Iran's oil infrastructure, their oil production and the Strait of Hormuz have caused oil prices to surge 8% late last week. That has continued into parts of this week," De Haan told New Jersey 1015. "Though oil prices did dip slightly yesterday, they are now back to a climb, as President Trump yesterday warned everyone in Tehran to evacuate."

Average gas prices in New Jersey

The price of regular is averaging $3.06 per gallon in New Jersey and could climb higher heading for the Independence Day holiday.

"As a result of what's happening in the Middle East, we could see gas prices climb another 10 to 15 cents a gallon over the next one to two weeks, and it could go beyond that, depending on how things develop in the Middle East," DeHaan said.

Diesel prices are likely to go up 15-25 cents per gallon.

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What pushes prices up?

It's a fear of the unknown, based on previous actions, that drive prices higher. Iran has threatened in the past to close the Strait of Hormuz, where much of the world's oil flows through. Israel bombed an oil refinery in the northwestern Iranian city of Tabriz.

"There's much more risk in the Middle East than there was a week ago, and that is why oil prices have gone up, and that's why we'll have to continue monitoring developments in the Middle East to know if that there is further risk of disruption or if there is physical disruption," DeHaan said.

The United States does not receive oil from Iran but countries like China that will be looking for other sources, which will impact global supply. There will have to be some clear signs of de-escalation to calm the oil market.

"Obviously, if the attacks were to stop, if the countries were to come to the negotiating table and figure something out that would help push prices lower. It would have to be something large and tangible to show that there's a reduction in risk in Iran not an increase in risk," De Haan said.

There is a bit of good news when comparing the price to last year.

"While our gas prices are going up right now and expected to continue rising, we still remain about 32 cents below where we were last year," DeHaan said.

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