WASHINGTON, D. C. (Tuesday, May 8, 2018) –– Motorists in the Washington metro area, as well as drivers across the United States,  could see higher pump prices due in large part to the re-imposition of economic sanctions on Iran, warns AAA Mid-Atlantic. Pump prices are only five cents away from the dreaded $3.00 per gallon threshold in the nation’s capital. By summer, Americans could see the national average price of a gallon of regular unleaded gasoline ranging from $2.80 to $3.00. The summer driving season is only 20 days away, and it runs along the bookend summer holiday weekends, from Memorial Day to Labor Day.

Motorists are already seeing much higher gas prices. Currently at $2.81, today’s national average is the highest since 2014. Consumers abhor $3 gasoline, but not as much as they used to do. More than ever before, consumers are also willing to pay more for gas during summer and even into the fall, as a 2018 NACS consumer survey reveals.

“Though anticipated, today’s White House decision brings a wide variety of global and domestic impacts,” said John B. Townsend II, AAA mid-Atlantic’s Manager of Public and Government Affairs.” In the United States, one of the largest potential impacts could be increased crude oil prices due to reinstated sanctions on Iran. In turn, this could lead to increased gas prices later this summer.” 

Here is a snapshot of pump prices in the Greater Washington metro area, as today.

CURRENT AND PAST GAS PRICE AVERAGES 
Regular Unleaded Gasoline

However, most motorists might not see any immediate impacts at the self-serve gas kiosk. It can takes weeks, usually month(s), for the market increase to translate over to retail prices. The retail increase will be dependent on how expensive crude oil price goes and the duration at which crude sells at the higher price point in the market. 

• On one hand, if in the end crude oil remains at $68-$70/ a barrel (bbl.), prices will not be that much more expensive this summer than they are now.
• On the other hand, if crude sells for $70+/bbl. for an extended amount of time, the national average could hit $3/gallon this summer.

Consumers and motorists alike will likely feel the geopolitical impact of  this afternoon’s White House decision to withdraw from the 2015 Iran nuclear deal, which could shrink shipments by 350,000 to 500,000 barrels a day on world markets, some analysts say.  It could trigger oil market volatility. 

After the deal was struck, Iran resumed its crude oil exports by selling more oil on international markets. During 2017, Iran exported nearly one billion barrels, a tally that includes nearly “777 million barrels of crude oil and 180 million barrels of condensate.”  The first oil well in the Middle East was drilled in Masjid-i-Solaiman, situated in the Khozestan province of Iran, in 1908. 

Crude oil prices will see the most immediate impact.  Ahead of today’s announcement, speculation was already driving crude oil prices higher in the market. On Monday, WTI reached a new high at $70.84/bbl. Tuesday market prices were up and down, but WTI is expected to close at $70.03.

Spending more on gasoline concerns consumers because it reduces savings and spending for everything else we need, notes AAA Mid-Atlantic. Yet with each passing year, Americans have grown significantly less likely to change their driving habits or lifestyles to offset gas prices.

AAA helps members save on the price of gas with tools to help you find the lowest gas prices in your area.  To find the cheapest gasoline prices around, or prices at individual gas stations, go to AAA Fuel Finder: http://www.aaamidatlantic.com/Outreach/GasInfo. Send a text anytime during the week to receive current prices. Text AAAGAS ZIP (e.g., AAAGAS 19801) to 87255.

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AAA provides automotive, travel and insurance services to 57 million members nationwide and nearly 78,000 members in the District of Columbia.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit  https://aaa.com