BRAZOS COUNTY, Texas (KRHD) — Gas prices have jumped across Central Texas and the Brazos Valley over the past week, and economists at Texas A&M University say the increases are tied directly to disruptions in the global oil market caused by rising tensions between the United States and Iran.
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Attacks and military threats since late February have disrupted shipping in the Strait of Hormuz — one of the most critical oil routes on the planet. Experts say about 20% of the world's oil passes through the narrow waterway, but many tankers are now staying away from the area.
Dennis Jansen, an economics professor at Texas A&M, said the situation is effectively cutting off a major artery of global oil supply.
"These large tankers full of oil and sometimes liquefied natural gas are less than 20 miles away from Iran, and given the hostilities, tankers are unwilling or unable to cross that strait."
Jansen said the impact on supply is significant.
"It's like a big blockade on your highway and no tankers going out, no tankers coming in. So there's a supply shortage in Asia."
When supply drops, prices rise — and drivers filling up locally are feeling it.
"For people filling up their cars, I doubt anyone's happy," Jansen said.
Raymond Robertson, a professor of economics and government at Texas A&M, explained how disruptions in the oil market translate quickly to the gas pump.
"Oil prices tend to spike right away, and then those increases in oil prices tend to work their way through into the gasoline markets."
Robertson said the math is straightforward for consumers.
"Every $10 increase in the price of a barrel of oil leads to about a 20-cent increase in the price at the pump."
Experts say the tensions between the U.S. and Iran are part of a conflict that has been building for decades, and the human cost on both sides weighs heavily on the situation.
"We know that there's American service people have died, and we know that a lot of Iranians, of course, have died as well. And so, we're still trying to figure out, you know, if it's really all worth it," Robertson said.
Robertson said he hopes leaders can reach a resolution before the conflict — and its economic consequences — worsen.
"We don't want people to be dying on either side for this conflict. I think that's the main thing, and hopefully we can reach a very swift resolution."
It is unclear how long prices could continue rising. 15 ABC will continue tracking this story and provide updates as they become available.
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