Conflict in Middle East could ‘severely’ impact gas prices in the GTA: analyst

En-Pro International chief petroleum analyst Roger Mcknight says it's 'anybody's guess' as to how U.S. operations against Iran may impact the price of gasoline.

The conflict in the Middle East is already resulting in rising gas prices in the GTA and at least one industry analyst says that any escalation could “severely” impact the cost of filling up.

Roger McKnight, chief petroleum analyst with En-Pro International, expects the average cost of a regular litre of fuel to jump by three cents on Wednesday to 1.38.9 cents per litre.

He said that “after that it is anybody’s guess,” where fuel prices go amid the conflict.

“If this thing escalates then the price of crude (oil) could jump severely and affect gasoline prices,” he told CP24 in an interview Monday.

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Iran exports approximately 1.6 million barrels of oil a day. While most of that goes to China, experts have raised concerns about the movement of oil through the Strait of Hormuz and the impact that could have on the global oil supply.

“If that choke point is closed off then supply can’t get through and the tankers just sit in the Strait of Hormuz and can’t go anywhere,” McKnight said.

Right now, a barrel of crude oil is worth about $67, McKnight said, warning that if it rose to $80 that would increase gas prices by about eight cents a litre “overnight.”

If the price of crude rises to $90 a barrel, a litre of gas would be about 14 cents more expensive and if it reaches $100, gas prices would rise 20 cents a litre, McKnight said.

The price of crude oil accounts for about 40 per cent of the price of a litre of gas, he said.

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“It’s a guessing game but its pretty dangerous right now,” McKnight said.

“It’s a very difficult situation, we haven’t seen this since the 1970s, how long it lasts is going to be a good question. (U.S.) President Trump says four to five weeks, I don’t know where he gets that number from.” McKnight said.

McKnight added that believes that the price of crude will continue to rise the longer the conflict goes on.