Waco, TX (FOX 44) — The Israel-Hamas War is causing strife in the Middle East and has the potential to directly impact us.
The Middle East is a mass producer of oil, and prices are starting to increase. Dr. Rob Tennant with A&M Central Texas says this is a typical situation that can happen in an oil-producing region.
With Israel currently locked in a conflict with Hamas, Tennant says it’s causing uncertainty about how much oil will be produced.
“In the short run, it’s created some uncertainty in the speculative market, which has caused the price of oil to go up approximately 4% a barrel,” said Tennant.
Tennant says we’re through the summer peak for oil production and gas usage. Gas prices normally go down in the fall, and Tennant says this trend should continue despite the conflict.
“When costs go up, the gas prices reflect it pretty quickly. However, gas prices have been coming down, so I would expect it to be a minor bubble unless things progress and widen in the region,” said Tennant.
Even though Israel is not an oil-producing nation, its neighboring countries to the east — Iran and Saudi Arabia — are mass-producing nations for oil.
Dr. Tennant says we could see a 12-cent increase in gas prices, but with the demand for gas going down, Tennant believes the U.S. oil supply can cover the difference.
“Texas is a major oil producer, and the U.S. in general is a major producer, so this would be an opportunity where we could increase our production to cover the differential in cost increase,” said Tennant.
Moving into the holiday season, Tennant doesn’t believe it will cause a spike in gas prices unless the conflict involves more nations.