Could Gas Prices Hit $5 A Gallon This Summer In Minnesota?

You've no doubt noticed gas prices increasing because of the conflict in Iran. When there's turmoil in the Middle East, we pay more for gas and diesel. Now with Iran retaliating with the closure of the Strait of Hormuz, we can expect prices to continue to rise.

Gas Goes Up Seasonally Even In Peacetime

Gas prices go up in the spring even during peaceful times. In Minnesota and other Northern Regions, we drive more in the summer. There's also the seasonal switch over from winter blend gasoline to summer blend gasoline. That seasonal disruption was already set to increase the price of gas by 30 cents a gallon or more. Now with the conflict in the Middle East, we've already reached an average in Minnesota of $3.25 per gallon.

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Iran + The Strait of Hormuz Situation

This morning, President Trump made an announcement that he's extended the deadline for Iran to open the Strait and suspended any air strikes on Iran's power plants. That's eased some concern this morning and helped stabilize oil prices.

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Still, some analysts say that if Iran doesn't open the Strait of Hormuz, oil prices could go to 200/ barrel. If that were to happen, prices would be well over $6 a gallon.

Beyond the gas crisis, we could be seeing inflation worsen. Diesel is very expensive, and that's still what primarily fuels our supply chain for trucking and transporting goods. Diesel is already nearly $5 a gallon in Minnesota.

Even if the conflict in Iran ended right now, we'd still see the prices continue to rise because of the shipping delays that have already happened.