Middle East Conflict Fuels Gas Price Surge, and More May Follow

Military strikes and escalating tensions between the U.S. and Iran have energy markets on edge. American consumers could feel the pinch at the gas pump and in their monthly utility bills.

While oil prices initially jumped 4% when trading opened Sunday night, they have since retreated as analysts weigh the risks to global energy supplies, CBS News reports. Still, many experts are watching closely to see how this conflict could affect your budget in the coming weeks.

The big concern is Iran’s threats regarding the Strait of Hormuz, a narrow waterway the country partly controls.

According to the Energy Information Administration (EIA), about 20% of the world’s daily oil supply passes through this 21-mile-wide chokepoint.

Any disruption there could send energy prices soaring, even though the U.S. imports only about 7% of its oil through the strait, per the EIA.

What gas prices might do next

You’ll likely see higher prices at the pump within the next week.

According to GasBuddy analyst Patrick DeHaan, drivers should expect gas prices to jump between 10 and 15 cents per gallon, with “most/all of the recent and expected rise … due to the Middle East tensions/situation,” CBS News reports.

Even with this bump, you’d still be paying less than last year. According to AAA data cited by CBS News, the average U.S. gas price currently sits at $3.22 per gallon, compared to $3.45 a year ago. But if the conflict escalates, all bets are off.

Eurasia Group analysts suggest that Israeli strikes on Iran’s oil facilities could disrupt millions of barrels per day, potentially pushing Brent crude prices above $80 per barrel, CBS News reports.

In a worst-case scenario where the Strait of Hormuz faces significant disruption, Oxford Economics analysts warn oil could spike to $130 per barrel.

The last time we saw those levels was in 2008, when gas peaked at about $4.11 per gallon — or roughly $6.26 in today’s dollars, according to the EIA and CBS News.

Could Winter Heating Bills Be the Next to Spike?

While summer drivers feel the immediate effects of rising gas prices, the impact on winter heating costs may already be taking shape.

Heating oil prices typically track crude oil closely, so sustained increases could hit budgets hard when colder months arrive.

Natural gas users might see less volatility at first. U.S. production remains strong and relatively insulated from Middle East conflicts.

However, CBS News notes that if oil prices stay high, some industrial users could switch fuels, pushing up demand — and potentially prices — for natural gas as well.

How long any energy spike lasts depends on the conflict’s trajectory.

According to Capital Economics chief climate and commodities economist David Oxley, “[S]o long as the conflict does not become a long-lasting war with no ‘off ramp,’ and disruption in the Strait remains limited to the lower-level actions seen up to now, we suspect that any initial spikes in global energy prices would dissipate before long,” CBS News reports.

Shield your budget from energy shocks

While geopolitical events remain beyond your control, you can minimize their impact on your finances.

1. Assess driving habits. Simple changes like combining errands, maintaining proper tire pressure, and avoiding aggressive acceleration can boost fuel efficiency. If you’re car shopping, prioritize fuel economy over flashy features.
2. Consider heating costs. Act fast if you use heating oil. Many suppliers offer price protection plans that lock in current rates for the winter season. While you’ll pay a small premium, it could save hundreds if prices spike. Schedule a heating system tune-up now, too. A well-maintained system burns less fuel.
3. Build budget flexibility today. Calculate what a 15-cent gas price jump means for your monthly spending and identify areas to trim. Plan for potential heating cost increases rather than scrambling when bills arrive. A tool like Origin can make budgeting easy.
4. Skip the panic buying. Topping off daily or hoarding heating oil creates artificial shortages that push prices higher for everyone. Maintain normal patterns unless officials advise otherwise.

Energy market volatility might define the coming months, but preparation softens the impact.

Monitor developments while focusing on controllable factors like consumption habits and budget cushions. History shows geopolitical energy spikes tend to be temporary. Being ready helps you ride them out with minimal financial damage.