Tensions involving Iran may push oil prices higher worldwide, and those increases could soon show up at the gas pump in Nevada.
Even though the United States produces much of its own oil, economists say global markets still determine what drivers pay.
Gas prices are already climbing in Reno. According to AAA, the average price for a gallon of regular gas is about $4.29, up from $4.14 a week ago and $3.86 a month ago.
Across Nevada, the statewide average sits at $3.97 per gallon, also trending upward in recent weeks.
Elliot Parker, an economics professor at the University of Nevada, Reno, says global oil markets react quickly when supply appears threatened.
“If you have about 20 percent of the world's oil supply coming through there, and there's a significant decline in how much is being shipped, then you're likely to see a significant jump in oil prices,” Parker said.
Much of that oil travels through the Strait of Hormuz, a narrow shipping route connecting the Persian Gulf to the rest of the world. Even the possibility of disruptions there can move markets.
“Of course, if there are actual strikes or a sinking of a tanker, then you would really expect to see the price jump up. Prices in these markets will respond both to current events and to projected events,” Parker said.
Drivers in Northern Nevada may also feel price changes differently than much of the country.
That’s because the region relies heavily on refineries in California.
“There’s not as much competition in the California market as there is in the rest of the country. Gas prices, once they go up, do not come down quite as fast,” Parker said.
Economists say if global oil prices continue rising, drivers could see additional increases at the pump in the coming weeks.
