DENVER (CBS) – Unrest in Iraq has prompted a jump in gas prices at time when drivers usually enjoy a break at the pumps.
Insurgents are fighting for control of Iraq’s largest oil refinery, leading to concerns the supply could be disrupted.
The average price has risen every day for a week and is at the highest for this time of year since 2008. That’s when gas prices hit an all time, topping $4 in Colorado.
Professor Ron Rizutto with the University of Denver’s Daniels College of Business does not believe prices will hit that mark again.
He said for now the conflict has not reached the majority of Iraq’s oil fields, which means crude oil output has not been impact.
He points out the price increase is speculative based on future worries.
“You’re going to see jitters continue here,” Rizutto said, “but barring any major invasion of Baghdad and worsening, we’re not going to see any major impact than where we’re at today.”
Iraq is OPEC’s second largest exporter but Rizutto said Saudi Arabia and Russia can make up for any loss in production.
He also pointed out unlike the Gulf War in 1999, the United States has vastly more domestic oil production today.
“From a U.S. standpoint, we’re moving in the direction of some independence and a net producer,” Rizutto said. “That’s a bit different from what we’ve seen before. We have more cushion.”
An increase of 10 cents in the price of gas costs a typical driver an extra $1.50 to fill up. Over time, that can can cost the economy billions of dollars.