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As the war unfolds in the Middle East, concerns are growing that Iran's ability to produce or export oil could be damaged. Industry experts are warning this could lead to a massive spike in the price of oil here in the United States, and that spike could happen quickly.
The main concern is how this could affect the flow of oil in the Persian Gulf. Oil producer Jay Young, CEO of King Operating**,** explained, "You've got a couple of islands where, if those are hit, and you disrupt that oil through the Bering Strait or the Persian Gulf, you're gonna see $120 or $130 oil just overnight."
Young confirmed that in the event that prices do rise that high, that quickly, it will be felt by consumers at the pump. He said, "If you do see prices go up, it will have a trickle-down effect. It has to; there's no question about it. How fast? I don't know."
While this might sound like good news for energy companies and oil producers, Young says this could create massive amounts of instability even for them. He said, "For us oil and gas producers, $60-$70 is great for us. It gives us stability, it gives us something to go off of, but when you get above $80 to $100-$120, you can't find services to drill wells, and you're paying double for things."
He also pointed out that this could result in heavy overinvestment in oil and gas production, which just leads to new wells being shut down after the price of oil inevitably falls back down again.