Gas prices are easing from their summer highs, according to analysts, but the respite for drivers may be temporary due to a turbulent hurricane season and escalating tensions in the Middle East.
On Tuesday, New Jersey motorists paid an average of $3.30 per gallon, according to AAA. This marks a slight decrease from $3.33 a week ago and $3.49 a month earlier.
Tom Kloza, an energy analyst at the Maryland-based Oil Price Information Service, explained to MarketPlace that this summer’s lower gas prices are largely due to reduced demand.
Recent data from the federal Energy Information Administration confirms that gas demand has continued to decline, while refining activities and fuel inventories have increased. Patrick De Haan, the head petroleum analyst at GasBuddy, and Andrew Gross, a spokesperson for AAA, echoed these findings. They also warned that rising geopolitical tensions in the Middle East could trigger a surge in oil prices, leading to higher costs at the pump.
U.S. officials have reported signs that Iran is preparing for an attack on Israel, following the assassination of a senior Hamas leader in Tehran last week. Israel, in turn, is continuing its military operations in the Gaza Strip.
White House national security spokesperson John Kirby warned on Monday that Iranian actions “could be this week.” He added, “We have to be prepared for what could be a significant set of attacks,” as reported by the White House press pool.
Despite the looming threat of conflict in the Middle East, Andy Lipow of Lipow Oil Associates in Houston told Yahoo Finance that “gasoline prices have seen their summer peak.”
However, the uncertainty doesn’t end there. The risk of a hurricane striking the Gulf states, particularly Texas and Louisiana—home to a significant portion of the nation’s refining capacity—adds another layer of unpredictability to gas prices this summer and fall.
Last week, Tropical Storm Debby avoided the Gulf region, instead tracking up the East Coast.