DENVER — Gas prices surged on Monday, in line with predictions from financial experts following the U.S. and Israeli attacks on Iran.
Gas prices jumped to an average of $2.86 per gallon in Denver, compared with $2.69 a week ago, according to AAA's fuel prices index. Prices at two gas stations in Denver's Washington Park neighborhood had climbed to over $3/gallon early Monday morning.
Iran produces about 3 million barrels of oil a day, which is about 3% of the world's supply, according to Bruce Allen, registered investment advisor.
"But the bigger piece of this is that a lot of oil goes through the Strait of Hormuz, which 20% of the world's oil goes through," Allen explained.
If Iranians close the straight completely, Allen said gas prices could increase even more.
He said the question now is how long the conflict will last.
"Is this going to be a brief conflict, less than a month, or is this going to be a long, drawn out conflict where the U.S. military is involved in the Middle East and for a significant period of time, months, if not years?" Allen questioned. "The markets would much prefer that to be brief versus long term right now, at least that's what we're seeing in the data we're looking at right now."
