Gregg Laskoski is a senior petroleum analyst for GasBuddy.com.
February has only just arrived and reporters are increasingly asking when gas prices will start going down. Unfortunately, the answer may be "Not any time soon." The U.S. average price of gasoline at $3.42 per gallon is the highest we've ever seen at this time of year, and NYMEX crude oil is trading between $98 and $101 per barrel. Brent crude is about 10 percent higher.
So when President Obama delivered his 2012 State of the Union address and he commented on Iran, undoubtedly people interested in oil trends listened. Here's what the president said on January 24:
Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal.
But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.
And just a few days after the State of the Union speech, it was U.S. Defense Secretary Leon Panetta who opted for some saber rattling of his own during an interview with reporter Scott Pelley on the CBS program 60 Minutes.
Panetta: "The United States, and the president's made this clear, does not want Iran to develop a nuclear weapon. That's a red line for us. And it's a red line obviously for the Israelis so we share a common goal here. If we have to do it, we will do it."...
Panetta: "If they proceed and we get intelligence that they're proceeding with developing a nuclear weapon then we will take whatever steps are necessary to stop it."
Pelley: "Including military steps?"
Panetta: "There are no options that are off the table."...
Panetta: "The consensus is that, if they decided to do it, it would probably take them about a year to be able to produce a bomb and then possibly another one to two years in order to put it on a deliverable vehicle of some sort in order to deliver that weapon."
Of course, we all remember when another U.S. president sent troops to find "weapons of mass destruction." President George W. Bush sent them to Iraq in March, 2003 claiming that the country was developing weapons of mass destruction and aiding al Qaeda. He acted on the best intelligence available from multiple military and international government sources and was excoriated for it.
Are the United States and Iran approaching a point of no return at the Strait of Hormuz? Could history repeat itself so soon? And if it did, how high might that push crude oil and the retail price of gasoline? Don't give it a thought—the price of gas would be the least of our concerns.