US and Israeli Strikes on Iran Trigger Oil Market Jitters

The US and Israeli strikes on Iran have sparked concerns that oil markets could be severely impacted. On Saturday, the two countries launched a large-scale attack on Iran, which is expected to rattle oil markets when trading resumes on Sunday evening.

One of the main concerns is not just Iran's own oil production, but its influence over the Strait of Hormuz, one of the world's most important checkpoints for oil. According to the US Energy Information Administration, approximately 20% of the world's oil passes through this waterway, making any disruptions a significant risk.

Saudi Arabia and the United Arab Emirates have limited infrastructure in place that can bypass the Strait of Hormuz, which could mitigate some transit disruptions but not entirely offset them. As a result, analysts are anticipating an immediate price reaction on Sunday evening, with crude oil potentially jumping 5-10% to above $70 a barrel.

Patrick DeHaan, GasBuddy's expert, expects this price jump to push the average price of gas above $3 a gallon for the first time this year. However, he notes that gasoline and diesel prices in the US will not skyrocket overnight, and the actual impact will depend on the intensity and duration of the conflict.