Gas Prices & Troubles in the East

by

Gas Station

Well now, ain’t this a pickle. Seems just when folks thought they had a handle on things, a bit of botherin’ commenced over yonder in the direction of Iran. And as predictable as a politician’s promise, the price at the pump took a jump. A right substantial jump, mind you – nearly half a dollar in a week. They’ve been creepin’ up since, reachin’ $3.88 a gallon as of Wednesday evenin’. A fella can almost smell the worry in the air, thicker than the exhaust fumes.

History, bless its dusty heart, tends to repeat itself, especially when it comes to oil and the pockets it lines. And history’s tellin’ us, plain as day, that these prices ain’t likely to be comin’ down anytime soon. It’s a lesson learned, and promptly forgotten, every generation or so.

A Look Back at Troubles Past

The trouble, as near as I can figure, stems from a supply shock. Seems the Islamic Revolutionary Guard Corps has decided who gets to move oil through the Strait of Hormuz, and it ain’t gonna be without their say-so. Our government’s talkin’ about escortin’ tankers, which sounds grand enough, but they ain’t exactly rushin’ into it. Seems like a heap of talk and not a lick of action, if you ask me.

This, naturally, has folks wonderin’ what it’ll do to the price of oil, and consequently, the price of gasoline. Well, if you look back through the years, you’ll see this song and dance has been played out more than once. Usually, it’s the same patch of desert where the current fuss is brewin’.

Gas Price Chart

If you examine a chart of gas prices – and I confess, I’ve spent a regrettable amount of time doin’ just that – you’ll notice spikes around the time of the 1973 oil embargo, the Iranian Revolution of ’79, and that little dust-up they called the Gulf War. Seems whenever somebody decides to rattle sabers near the oil wells, the price at the pump gets a case of the jitters.

1973: The First Pinch

Now, back nearly fifty years ago, when OPEC decided to embargo oil shipments, gas prices didn’t exactly skyrocket right away. They went up about ten percent, to 39 cents a gallon. But then, in ’75, they really took off, reachin’ 53 cents. A forty-seven percent jump! And they haven’t been that low since, no sir.

1979: When the Shah Fell

Then came the Iranian Revolution in ’79, when the Shah was ousted. Gas averaged 63 cents that year. But hold onto your hats, because it surged 36 percent to 86 cents in ’80, and then another 38 percent in ’81. It took six years – six long years – before prices got back to 1980 levels. A fella could barely afford to drive to church!

1990: A Brief Respite

In 1990, gas averaged a dollar a gallon before Saddam Hussein decided to invade Kuwait. Thankfully, a quick response pushed him back out by ’91, limitin’ the price increase to $1.14 a gallon. And what’s more, with Hussein chastened, the region settled down, and prices actually fell. They were $1.13 in ’92, $1.11 in ’93, and still $1.11 in ’94. It was 1995 before inflation came callin’ again.

What Does It All Mean?

Now, what can a body learn from all this history? Well, first off, that initial 48-cent jump in gas prices might just be the beginnin’. The United States Oil Fund (USO +3.47%) ETF is up nearly 50 percent since the war started, after all. A year from now, gas prices could be even higher, and they might not come back down for years, if ever.

Unless, that is, the current conflict resolves the underlying issue – a belligerent Iran able to choke off global oil supplies at a whim. If you remove that threat, there’s a chance, as in 1991, that gas prices could return to “normal” after the shootin’ stops. Though I wouldn’t bet my farm on it.

So, keep your fingers crossed, folks. And maybe consider walkin’ a bit more. It’s good for the soul, and saves a heap of money.

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2026-03-21 13:02