Long lines at gas pump unlikely, but Middle East crisis could disrupt oil supplies, raise prices

Fifty years after the 1973 Arab oil embargo, the current crisis in the Middle East has the potential to disrupt global oil supplies and raise prices.

FILE - Pumpjacks dip their heads to extract oil in a basin south of Duchesne, Utah on July 13, 2023. U.S. oil production is at an all-time high. The U.S. Energy Information Administration, an arm of the Energy Department, reported that American oil production in the first week of October hit 13.2 million barrels per day, passing the previous record set in 2020 by 100,000 barrels. Weekly domestic oil production has doubled from the first week in October 2012 to now.

Any damage to Iranian oil infrastructure from a military strike by Israel could send prices jumping globally. Even without that, a shutdown of the Strait of Hormuz that lies south of Iran could also shake the oil market because so much of the world’s supplies goes through the waterway. In a speech Wednesday marking the 50th anniversary of the 1973 oil embargo, Sommers said current U.S. production contrasts sharply with “America’s weakened position during the Arab oil embargo.'' He urged U.S. policymakers to heed what he called the lessons of 1973.

There are several wild cards in the energy market. One is the supply of Iranian oil. Eager to avoid a spike in gasoline prices and inflation, the U.S. has quietly tolerated some exports of Iranian oil to destinations such as China instead of going all in on sanctions aimed at Iran’s nuclear program.

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