Will war in Israel affect gas prices? What to know about costs at the pump going up

Global oil prices jumped 4% after Hamas attacked Israel last weekend, but energy analysts say they don't expect the Israel-Hamas war will significantly drive up oil and gasoline prices.

Even with the oil markets' immediate reaction, oil prices are down about 7% from the year's peak in late September and fell slightly in Monday morning trading after jumping 5% on Friday, according to Yahoo! Finance. Prices at the pump have followed a similar downward path in recent weeks, according to AAA.

"As always, a certain amount of short-term speculation takes hold in these situations," John Graves of Graves & Co., an oil and gas consultancy, said in an email to USA TODAY. "But I think the overall impact on prices at the pump will be muted."

Price of a barrel of oil rises after attack on Israel

Oil prices turned up once markets opened Oct. 9 – the first trading day after the attack. After a dip in prices last week, oil prices were elevated again Monday morning – as Israeli troops massed along border of Gaza for a possible ground invasion.

Gas prices could increase in weeks ahead

Gas prices have been declining since peaking in September when Saudi Arabia and Russia first said they would cut their daily production by 1 million barrels. At the same time, U.S. refineries' gasoline production had been slowed by record heat in the South.

With cooler weather and summer driving season over, that decline will likely continue.

"For the foreseeable future – for the next, shall we say, 15 to 40 days – people are going to see gas prices dropping," said Tom Kloza, global head of energy analysis at Oil Price Information Service. "Longer-term, it's a concern."

Why the Israel-Hamas war impact for now is small

The U.S. is the biggest oil-producing country in the world. It also uses the most oil. In 2022, the U.S. produced 20.3 million barrels of oil a day while using 19.9 million barrels, according to EIA estimates.

Even though the U.S. produces more than it needs, it's not immune from global shocks. Just last summer, the average price for regular gas topped $5 in mid-June as Russia, the world's third-largest oil producer, continued its offensive against Ukraine.

Involvement by more Mideastern countries could drive prices higher

Israel is not a major oil producer, but nearly 30% of the world's oil production occurs in countries just to its east, including the world's second-largest producer, Saudi Arabia.

Iran, another top producer in the region, has been accused of assisting in the attack. Iranian leader Ayatollah ali Khamenei denied involvement on Tuesday, blaming Israel for the war and threatening that the Israeli response might provoke his country.

A ramping up of the conflict in the region is what Graves sees as the longer-term concern for oil and gas prices.

"If the conflict is prolonged, and sanctions tightened, would Iran attempt to put a stranglehold on tanker traffic through the Strait of Hormuz?" Graves wrote. "All of this would tend to reduce the supply of crude oil longer-term, and as crude prices rise, it would tend to have an impact on gasoline prices in the U.S."

Contributing: Daniel de Visé