Gas prices have skyrocketed since President Donald Trump launched his war against Iran, increasing by roughly a dollar per gallon to reach a national average of just under $4 per gallon so far. Today, oil prices soared to above $116 a barrel following Trump’s assertion that he wanted to “take the oil in Iran” and invade the Iranian oil center at Kharg Island, and according to CNN senior business reporter David Goldman, that’s bad news for both individual consumers and the U.S. economy as a whole.
As Goldman explained, roughly 20 percent of the world’s oil is transported through the Iran-controlled Strait of Hormuz, which has been almost entirely closed for weeks now.
“If that oil doesn't come through,” said Goldman, “oil will continue to go higher and higher and higher, and that can become a real problem not only for consumers — and certainly it is very painful to fill up at the pump — but also for the broader economy.”
According to analysts, if the war goes on until June, it could push the price of a barrel of oil to over $200, which would result in gas prices of approximately $7 per gallon. That doesn’t just mean a hit to American wallets, but could drag the whole economy into recession.
As Goldman explained, the math on $7 gas does not look good.
“Imagine if it went up to $7,” he said. “For every $10 that oil rises, you're going to get maybe about $450 in additional expenses. For an average American family, you're looking at something close to $6,000 that people are going to have to spend over the course of a year.”
For months now it’s been reported that a high percentage of Americans have depleted their savings and are living paycheck to paycheck, and that an increasing portion of national spending is being bought on credit. More recently, it has come out that a growing number of Americans are missing their debt payments.
In the face of that already poor economic situation, Goldman asked an essential question: If Americans are already missing debt payments, “How can they afford $6,000 in additional payments?”
