The summer driving season may just have gotten more expensive.
US and global crude oil prices are near six-month highs as the White House said Monday it would not extend exemptions to Iran’s oil sanctions that were set to end in May. The news triggered an immediate spike in oil prices and comes as gasoline demand seasonally rises as Americans prepare for summer road trips.
Beth Mosher, spokeswoman for AAA, which tracks gasoline prices, said based on the Iranian news, AAA forecasts nationwide gasoline prices to rise over $3 a gallon this summer. That’s 15 cents a gallon more than current prices and above last summer’s prices, she said.
The end to Iranian sanctions waivers throws uncertainty into a market already dealing with lower global supply due to agreed-upon production cuts by Organization of Petroleum Exporting Countries. Other Opec members are in trouble, too. US sanctions on Venezuela come into effect at month’s end, and renewed tensions in Libya threaten to disrupt their supply.
