DENVER, Colo. — Gas prices in Colorado and across the country rose sharply on Monday as U.S. and Israeli strikes on Iran caused major disruptions across the region.
At one point, crude oil futures jumped just under 9% on the New York Mercantile Exchange from its closing price of $67.29 on Friday to $73.19.
Brent crude futures rose even higher, by as much as 13%, to their highest level in over a year.
The increase has put pressure on gas prices, which rose nationally by 5.6 cents over the last week, according to GasBuddy.
Colorado has seen a similar increase, rising 6 cents from Sunday to $2.88 a gallon.
“There's always going to be an immediate reaction by the market. And today we saw nothing different than what we would expected, which is oil prices spiked," said Denver-based certified financial planner, Chuck Bautista of WP Wealth Advisors.
Bautista said we can expect higher gas prices for about a month, and it hinges on the laws of supply and demand.
Due to sanctions on the country, Iran accounts for only about 4% of the world’s oil production, according to the U.S. Energy Information Administration.
The main pressure comes from the Strait of Hormuz, a major chokepoint that flows between Iran and the U.A.E.
According to the Energy Information Administration, 20% of the world’s daily oil supply passes through the strait, which connects major exporters Saudi Arabia, Iraq, and Kuwait to the rest of the world.
On Monday, Iran said the Strait was closed and warned it would attack any ships trying to pass, according to Reuters.
President Donald Trump signaled the situation in Iran could continue for four to five weeks, but has the “capability to go far longer than that.”
“If we see a situation where the there's a regime change [in Iran], and that regime change is friendlier to US interest in the area, could that impact oil prices and bring them down," said Bautista.
He added that is the likely case in that scenario.
Bautista told Scripps News Denver if that happens, sanctions would ease and new oil could flood the market, knocking down what you pay at the pump.
The opposite could also happen. With an unfriendly regime, Bautista said sanctions could tighten and prices could increase further, adding it’s simply impossible to say what is the likely scenario at this point.
“President Trump stated four to five weeks, but we'll stay there for as long as needed. That would be what I would expect our timeline to be in terms of what the impacts are on the economy," said Bautista.
If want to check for the cheapest gas prices near you, click here to use this price tool from GasBuddy.
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