NEWTON, Mass. — Growing hostilities between Iran and the United States are heightening concerns that the world’s oil supply could be disrupted.
Here at home in New England, we are especially vulnerable to oil price fluctuations because this part of the country doesn’t produce any of its own oil.
So gas prices, even electric rates, could be impacted by what’s happening in the Middle East.
If Iran closes the Strait of Hormuz, the narrow 21-mile wide choke point at the Persian Gulf, the price of gas may skyrocket. That’s because 20% of the world’s crude oil passes through their every day.
As New Englanders fill up on the first day of an incoming heatwave, the possibility that oil supplies may be impacted is bad news.
“It’s so, so frustrating,” Andrew McCoy, a Rhode Island native said. "Can’t do anything about it. But it’s so frustrating."
In recent weeks, as uncertainty grips the Middle East, oil prices have already started to climb.
Now Iranian leadership is seriously considering a more drastic step.
"Should the Strait of Hormuz actually get closed, you could certainly see oil prices up over one hundred dollars a barrel, that would be a good 25 percent jump from where we already are," said Michael Armstrong, President of the Armstrong Advisory Group.
Higher oil prices could also mean higher electric rates, so the cost of keeping a house comfortable could climb too.
All of it means, everyone in New England might be taking a financial hit if the Strait is closed.
In the last few years, the United States has emerged as a major exporter of oil and in the long term, that could keep price increases in check.
But in the short term, we could be paying more for fuel.
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