Diesel fuel and gasoline prices have crept upward in the United States since the onset of the Israel-Iran war, according to the U.S. Energy Information Administration.

Israel unleashed attacks on Iran on June 14 aimed at aimed at degrading that country’s ability to produce nuclear weapons.

On June 21, the United States launched strikes at Iranian nuclear facilities.

Since those attacks, the price of gasoline and diesel fuel has increased 30 cents gallon on average in the U.S., according to U.S. Energy Information Administration.

U.S. Energy Information Administration is an independent statistics and analysis firm that tracks petroleum prices in the U.S.

Geopolitical Instability Affecting Crude Oil Prices

According to CBS News, the price of Brent crude oil – considered the international standard for tracking petroleum prices – shot upward on Monday, June 23. The price of Brent crude then dropped later in the day, settling at $76.98 a barrel.

At the same time, West Texas crude oil – the U.S. benchmark for petroleum pricing – dropped to $71.06 a barrel.

A barrel of West Texas crude a week ago, before the onset of hostilities between Israel and Iran was around $68 a barrel.

Industry analysts credit the drop in pricing to the current belief that Iran is not likely to close the Strait of Hormuz in retaliation for the Israeli and U.S. strikes.

Iran controls the northern shore of the 21-mile-wide Strait of Hormuz.

The Iranian Parliament approved an action plan to close the strait down – pending approval by the country’s national security council.

So far, the council has not acted on that resolution.

Roughly 20% of the world’s daily supply of oil passes through the Strait of Hormuz. Shutting the waterway down would significantly drive-up fuel prices in the U.S. and for much of the Western world.

The U.S. imports about 7% of its oil through the Strait of Hormuz. 

According to the Oxford Economics, in a worst-case scenario, closure of the strait could drive oil prices as high as $130 a barrel.

The last time a barrel of Brent crude topped $130 a barrel was in 2008, the U.S. Energy Information Administration noted. At that time, U.S. gasoline prices shot up to $4.11 a gallon.

That would translate to $6.26 a gallon today, after adjusting for inflation.

A Cautiously Optimistic Outlook

American drivers are still likely to see higher fuel prices over the next week or so, according to GasBuddy analyst Patrick DeHaan. His analytic firm suggest that fuel prices will likely rise between 10 and 15 cents a gallon in coming days.

These prices are in additional to season fuel price increases, the U.S. Energy Information Administration noted. Historically, fuel prices tend to gradually rise beginning in the Spring and leveling off in late Summer. This is mainly due to increased demand as more motorists hit the road during warmer summer months.

At the moment, however, most analysts are cautiously optimistic that the current unrest in the Middle East will not cause a sharp increase in domestic fuel prices in the U.S.

“So long as the (Israel-Iran) conflict does not become a long-lasting war with no off ramp, and disruption in the Strait remain limited to lower-level actions seen up to now we suspect that any initial spikes in global energy prices would dissipate before long,” said David Oxley, chief climate and commodities economist at the Capital Economics analyst group.