Doomsday's Not So Farfetched
Forget $5 gas, the new worry is $6 gas: Middle East strife threatens to pushprices to record levels
Could oil expert John Hofmeister's prediction of $5 gas in 2012 be too low? As tensions continue to mount over Iran's nuclear program, some analysts say . . . well, maybe.
The first two weeks of February already have seen a surprising 18-cent jump in fuel pump prices according to petroleum Lundberg Survey, which charted a national average of $3.69 on Friday.
The online user-generated research group GasBuddy reported a slightly better national average at $3.65 per gallon with Houston clocking in at $3.54 — increases of 31 and 33 cents, respectively, from this time last year.
"People may think we're reporting that the sky is falling, but you can't rule out any of these things happening," p e troleum analyst Gregg Laskoski says about current Iran-Israel tensions.
In line with much of Hofmeister's worries about unstable geopolitics, GasBuddy analyst Gregg Laskoski tells CultureMap that the current strife in the Middle East could push gasoline prices considerably higher than $5 a gallon.
"The wild card is that we don't know when or if there will be a peaceful resolution between Israel and Iran," he says. "Secretary of Defense Leon Panetta believes there's a better than a 50 percent chance an [Israeli] attack could happen this April, May, or June."
Laskoski warned that a military dispute of this magnitude could spike crude oil prices as high as $200 a barrel. Based on petroleum industry estimates, the cost increase would add $2.50 to existing gasoline prices, which would top them off well above $6 a gallon.
"People may think we're reporting that the sky is falling, but you can't rule out any of these things happening," he says. "Prices this high could be a tremendous catastrophe for the American economy."
Laskoski's immediate solution? Well, he didn't really offer one, per se.
He did note, however, that the best medicine is simple car maintenance to help conserve resources. Here's his four-point vehicular attack:
- Check the tire pressure — Manufacturer's suggested pressure levels are designed for fuel economy.
- Get a wheel alignment — Uneven wheels make a car work harder and cause serious wear to tires.
- Replace air filters — Dirty filters can slow a vehicle's efficiency, leading to higher gasoline usage.
- Lighten the load — No need to use your car like a closet, so empty the trunk and clear out that back seat.
"It's important not to obsess and focus on the things you can't control," Laskoski says, adding that consumers tend to modify their behavior as gas creeps closer to $4. Natural responses to high prices like these, he assured, always will lower demand in the long run.
For now, let's just hope for a peaceful outcome to the Israel-Iran disputes.
