The US-Israeli conflict with Iran is taking an increasing toll on New England consumers, as a snarled global oil supply chain has consumers paying dramatically more for gasoline and home-heating fuel than they were before the war broke out.
Average Massachusetts gasoline prices have risen nearly 40 cents over the past week, to about $3.31 a gallon, according to AAA, after long hovering below the $3 mark. Heating oil, likewise, climbed about 20 cents a gallon from the week of Feb. 23 to the week of March 2, according to state data, with colder temperatures poised to descend again on New England despite this week’s spring-like respite.
While the price shock is already hurting consumers in the short term, the ripple effects of those rapid cost hikes — which experts say could worsen if the war in Iran drags on — threaten to reignite broader inflation on everything from supermarket items to airfare to mortgage rates.
“Every day, it’s something new,” said Kaela Nurmi, an art conservator who filled up her tank at JP Oil on Monday. “You hope things can get better from here, but it doesn’t feel like it, and I’m just angry.”
The rise in oil and gas prices is a result of the conflict that broke out late last month when the US and Israel attacked Iran, prompting counterattacks on a slew of other Middle Eastern countries. The fighting has effectively shut down the Strait of Hormuz, a crucial passageway that typically carries around 20 million barrels of oil a day. Disruptions have also hit oil fields, refineries, and terminals.
The price of a barrel of Brent crude oil retreated to $98.96 in trading Monday, significantly below the $119.50 price seen late Sunday. The drop came after after world leaders discussed — but ultimately decided against — releasing oil from their strategic reserves, and President Trump told CBS News that the war was “very complete, pretty much.”
On Sunday evening, in a post on Truth Social, Trump cast rising oil prices as a short-term issue that would resolve “when the destruction of the Iran nuclear threat is over,” and described it as “a very small price to pay for U.S.A., and World, Safety and Peace.”
“ONLY FOOLS WOULD THINK DIFFERENTLY!” the president added.
Regardless, since it takes up to a week for changes in oil prices to show up at the gas pump, prices are likely to keep rising for now.
“Then the question becomes, are crude oil prices going to remain high, or are they going to come back down,” said Robert Kaufmann, a professor in the earth and environment department at Boston University. “And that’s an open question . . . but there are many reasons to think it can remain high.”
Mark Schieldrop, senior spokesperson for AAA Northeast, also isn’t so sure the rise in costs will turn out to be a blip. Despite the fact that the US has beefed up its production since Russia’s invasion of Ukraine spurred $5-a-gallon gas prices in 2022, the price of oil is set globally, and can’t be insulated from worldwide shifts.
“If things just kind of continue on, we could be in for much more pain,” he said.
The pain could hit New England particularly hard, he said, because Massachusetts produces and refines none of its own crude oil. That means that fuel is largely ferried in on trucks, which use diesel — a fuel that is climbing in price even faster than gasoline.
And higher costs for oil are likely to mean higher costs for all the goods transported in trucks, trains, and planes that rely on it. “You name it, gasoline is sort of the blood of the economy,” said Schieldrop.
Home-heating oil, too, has been subject to significant increases, coming at the tail-end of a bitter winter that has squeezed New Englanders’ pocketbooks.
Mid-morning on Sunday, as Richard DeRoeck was doing chores around his Woburn home, the delivery truck from Cubby Oil & Energy pulled up, just like it does most months in the winter. But unlike most months, when DeRoeck checked the mailbox for his invoice after the truck left, he was met with a surprise: a $900 bill, up from around $400 last month thanks to recent cold weather and rising prices.
Given the war in Iran, “I expected it to be higher,” he said. “I didn’t expect it to be that high, though.”
Had that delivery come a day later, the costs would have been even higher. On Sunday night, one of Cubby’s main wholesale suppliers raised its per-gallon cost by 50 cents in response to the global market, said owner Charlie Uglietto.
“It’s big numbers, and we struggle to keep up with that,” Uglietto said.
Those cost increases hit low-income households hardest. Massachusetts residents who qualify for the state’s home energy assistance program can receive up to $1,000 in benefits for delivered fuels, like oil. But at this point in the year, after a cold, snowy few months, most have already gone through that, said Sharon Scott-Chandler, chief executive of The Action for Boston Community Development, which administers the aid for families in the Boston area.
“These folks, they really don’t have any money to fill another tank, and especially not at this price,” she said.
Even before the war in Iran began, causing costs to spike, Scott-Chandler said her organization was working on a request to the Healey administration for an additional $35 million — enough to purchase about a half a tank of oil for everyone in the state who currently receives or qualifies for the energy assistance program.
Now, she said, “we might have to go back to the drawing board,” to reconsider how much will be needed, given the cost increases.
There’s another energy worry, too.
It’s not yet clear the extent to which domestic gas prices will feel the effects of changes in the global liquid natural gas market. For now, several energy experts said, those impacts appear to be limited. But with time, that could change — driving up both heating and power costs.
“If this extends into next winter, global LNG and oil prices will drive electricity prices in New England once again,” said Tanya Bodell, an energy adviser and partner at Boston-based consulting firm StoneTurn.
At the gas pump, tensions are already running high. “People are crazy,” said Carlos Lewis, an attendant at Super Petroleum in Weymouth, shaking his head as he described being yelled at by customers, angry about the prices.
Some customers said they were had no problem forking over more for gas to support what they described as a noble foreign intervention. “I’m willing to pay a higher price to get rid of this terrorist country that we’re fighting against,” said Alda Moniz, 73, who stopped for gas in downtown Fall River on Monday.
Aside from limiting driving, Schieldrop, the AAA spokesperson, had a few tips for drivers looking to make the most of their tanks: Drive slower, keep a good following distance on the highway to avoid braking, make sure your tires are properly inflated, and take out any unnecessary items from your trunk or off your roof. There are also apps, like GasBuddy, to find the cheapest gallons near you, and plenty of fuel rewards programs. But in the meantime, the pinch at the pump is likely to feel pronounced.
“Drivers see those prices in their face every day, so it’s really kind of a benchmark for folks to measure what’s going on in the economy,” he said. “If gas prices go from below $3 a gallon to, say, $4 a gallon in the next couple of weeks, that’s going to have a significant impact on families.”
Back at JP, Nurmi, the customer who went for a fill-up Monday, said she’s lucky because she can take the T to work, and mostly uses her Toyota Corolla for errands and visiting family and friends.
“But I don’t have a lot of expendable income,” she said. “So five more dollars here and there, it adds up.”