What the strikes in Iran could mean for Minnesota gas prices
As the strikes from U.S. and Israel continue, and Iran strikes back, the violence and turmoil could have significant worldwide ramifications.
"Right now, those economic impacts are going to be limited, but the place we're going to be looking for is oil prices," said Tyler Schipper, a professor of economics at the University of St. Thomas.
As conflict could severely limit and delay oil supply, Schipper said it might result in just a small bump in gas prices here in Minnesota, at least at first.
"I think there is reason to be concerned, given that this is an area that produces a lot of oil, but also being cautious in that concern," said Schipper.
How long the unrest lasts is key, with longer conflict meaning greater impact. President Trump said on Sunday that operations will continue "until all of our objectives are achieved."
There's Wall Street speculation of reaching $100 per barrel for oil, a potential worst-case scenario, which has led to paying more than $4 per gallon of gas in Minnesota in recent years, Schipper said.
There's one more recent factor playing in the U.S.'s favor.
"Now, the number one oil producer is the United States, and so that does a lot to cushion some of these shocks from oil prices and instability in the Middle East," said Schipper.
The Strait of Hormuz, which runs south of Iran, is a crucial shipping route for oil. Twenty percent of the world's oil goes through the channel.
Any disruption, or even a perception of risk there, would have an impact, Schipper said.
"The bottom line is that oil is a global market and if it goes up in price for Asian markets, it's also going to press up the price for domestic consumers in the United States," he said.