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Gas Prices Rise, Driven Up By Iraq Conflict

6-24-14

By Christie Duffy
Correspondent

You may be paying more the next time you fill up at your local gas station.

AAA says the fighting in Iraq is driving prices at the pump to a high not seen in early summer in six years. Today marks the 12th day in a row that there has been an increase.

“The gas prices keep going up and up and our salaries are staying the same. We can’t even afford to get to work,” said driver Mary Anne Mazza.

Reports coming from Iraq today say insurgents have “fully captured” the country’s main oil refinery, just north of Baghdad.

“This is one of the biggest refineries in all of Iraq and it really provides about one-third of all of the energy,” said Phil Flynn, senior market analyst for The PRICE Futures Group.

“If oil is really disrupted in the Middle East, the supply is not going to be able to meet the demand and we all know what that leads to. It leads to higher oil prices,” said Dr. Eric Davis, Political Science professor at Rutgers University.

The national average for gas is $3.68 per gallon, according to AAA. And driving around New Jersey today, most stations are hovering right around that mark.

“Really if there continues to be that instability, you’re going to see fluctuations. If there is a resolution you’ll see them level out,” said AAA New Jersey Public Affairs Director Cathleen Lewis.

Oil prices have been trading near a nine-month high — as insurgents have taken full or partial control of cities across north and west Iraq, nearing the country’s capitol.

Secretary of State John Kerry met again today with with Iraqi leaders. Officials in Washington have suggested that Iraqi Prime Minister Nouri al-Maliki should resign to restore the peace.

“The bottom line here is he’s alienated everyone. Not only the two other major ethnic groups the Kurds and the Sunnis but also within his own Shiite community,” Davis said.

As for drivers here in New Jersey, analysts say watch closely for news out of southern Iraq.

“So far exports in the southern part of the state have not been impacted. In fact there is even reports that Iraq is actually exporting even more oil, because they want to export the oil while the exporting is good,” said Flynn.

So far, the south is still held by the government. But that’s where AAA says most of the country’s oil production is located.