Spoiler alert: Reading further may take some of the thrill away from that trip to the beach you’ve been daydreaming about as the weather grows warmer.
Prices for crude oil climbed the most in three months on Monday after the Trump administration tightened sanctions on Iran in an attempt to eliminate its fuel exports entirely, a shift that signals higher gas prices just as motorists take to the road for summer getaways.
West Texas Intermediate crude, the benchmark for U.S. prices, rose 2.8% to $65.60 a barrel in New York trading, the biggest increase since January.
“Should history repeat itself like last year and crude prices continue to increase because the sanction waivers end, we can expect to see higher pump prices coming,” AAA spokeswoman Jeannette Casselano told the Washington Examiner.
If crude reaches 2018’s high near $77 a barrel, average gas prices may climb from the current $2.83 a gallon to almost $3, according to AAA, the nonprofit organization that offers roadside assistance for motorists and tracks gasoline costs.
The spike in crude costs last year followed President Trump’s decision to pull out of an international agreement that lifted sanctions on Iran in return for its commitment to halt nuclear weapons development.
The higher costs didn’t halt summer travel then, Casselano added, and probably won’t do so in 2019 — though they will crimp travelers’ budgets.
“The summer is synonymous with road trips,” she said, and workers who have earned the time off “want to make memories” and enjoy it.
“They may shorten the distance, they may not eat out as much, and they may look for free activities to do on vacation,” Casselano said, “but we don’t see it slowing summer travel.”
Under the latest moves against Iran, waivers granted to eight countries buying oil from the Islamic republic won’t be renewed after the May 2 expiration, and the U.S. will cut off access to its financial system for those that don’t find other suppliers, said Secretary of State Mike Pompeo.
While two U.S. allies have committed to making up the shortfall created by isolating Iran, which is the world’s sixth-largest oil producer, the reduced supply’s immediate impact on prices suggests at least interim pain for motorists.
Many reacted accordingly, berating the president on Twitter despite his post promoting the policy move and attempting to head off criticism.
Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil. Iran is being given VERY BAD advice by @JohnKerry and people who helped him lead the U.S. into the very bad Iran Nuclear Deal. Big violation of Logan Act?
— Donald J. Trump (@realDonaldTrump) April 22, 2019
Saudi Arabia and the United Arab Emirates “have committed to ensuring there is sufficient supplies in the markets and I am confident they will support this policy that is consistent with their objectives as well,” Pompeo told reporters on Monday.
Still, Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, has been cutting production in a deal with Russia since the beginning of the year, after oil prices sank lower than the countries preferred when Trump granted the sanctions waivers.
[Read more: Trump: Iran is getting ‘VERY BAD advice’ from John Kerry]
