FRESNO (KMJ/AP) — The United States’ decision to leave the Iran nuclear accord could have a ripple effect on the wholesale price of gas. The warning from AAA revealed that it could spark volatility in the markets.
“Which could reduce supply, which will cause oil prices to go up,” explained the group’s Mike Blasky.
“If oil prices go up, gasoline typically follows that trend line. If there is disruption and volatility in the market because of this decision, likely that will cause oil prices to go up if that supply is threatened.”
The federal government’s decision to end the agreement therefore restores sanctions which limit Iran’s ability to sell oil. The Middle East country is currently the world’s fifth largest producer.
“AAA does predict gas prices will keep rising. We talk a lot about the supply, but there has also been really strong gasoline demand which has been pushing prices up.
“Especially in California where our economy is doing pretty good and there’s more people driving. So we do expect prices that will keep going up, at least through Memorial Day.”
It comes as the summer-blend of gasoline is already being sold for the 2018 season.
Hear the report from KMJ’s Dominic McAndrew as it aired:
