Oil prices rose Monday (Feb. 20) after Iran cut exports to Britain and France, raising worries that higher gas prices may follow suit.
CNN Money reported that Iran’s oil ministry said Sunday it would stop exporting oil to French and British companies. The announcement came just days after Iran threatened to cut supplies to some European Union (EU) countries in retaliation for sanctions put in place by the EU and United States.
U.S. crude for April delivery jumped nearly 2% to $105.08 per barrel.
Prices are already up nearly 9% from the start of the year. According to motorist group AAA, the national average price of $3.56 a gallon marks the 13th consecutive increase.
The price of unleaded gasoline in the U.S. will likely hit a nationwide average of $4 by this summer, said Dan Dicker, oil trader and author of “Oil’s Endless Bid.” The last time prices topped $4 was 2008 and Dicker said there’s a one in three chance that gas could reach $5 a gallon.
If gas prices do head to those lofty levels, that could put a crimp in the economic recovery as consumers will likely cut down on spending if they have to pay more to fill up their cars.