Six months after the conflict involving the United States, Israel and Iran began, the effects of disruption in global oil markets are still reaching New York drivers, truckers and homeowners preparing for the heating season.
The conflict began Feb. 28 and affected shipping through the Strait of Hormuz, a narrow waterway connecting the Persian Gulf and the Gulf of Oman. The U.S. Energy Information Administration says oil flow through the strait was equivalent to about 20% of global petroleum-liquids consumption in 2024.
Greg Nowell, an associate professor of political science at the University at Albany, said the route’s importance means instability there can have global consequences.
“The Strait of Hormuz is basically the passageway through which about 20% of the world’s oil passes in good times,” Nowell said.
Nowell said alternate export routes have helped avoid some of the global shortages that analysts feared at the beginning of the conflict. But he said the disruption still affected worldwide oil supplies and prices.
“There are a few alternate routes which have kept the oil flowing, but it has had a major impact nonetheless on global oil prices and global supplies,” Nowell said.
The effects have been visible at gas stations across New York. AAA’s statewide average for regular gasoline was about $4.19 a gallon Friday, while the average diesel price was about $5.73 a gallon.
New York’s statewide average regular-gas price was $4.085 per gallon for the week of Aug. 24, according to state data based on U.S. Energy Information Administration figures. That was up 33.7% from the same week a year earlier. The upstate New York average was $4.165 per gallon.
Robert Sinclair Jr., senior manager of public affairs for AAA Northeast, said crude oil sold for $67.02 a barrel on Feb. 27, reached a peak of $112.95 on April 7 and stood at $83.46 on Friday.
“So goes the price of crude oil, so goes the price of gasoline,” Sinclair said.
Diesel costs also affect the broader supply chain because trucks move food, medicine and other goods to stores and consumers.
Zach Miller, vice president of government affairs for the Trucking Association of New York, said trucking companies have limited ability to absorb higher operating costs.
“There’s only so much costs that the industry can take on,” Miller said. “What a lot of people probably don’t realize is that the trucking industry operates on very thin profit margins. We’re talking about between 1.5% and 3.5%, and the truth is, most trucking companies are small businesses.”
The trucking industry provides nearly 328,000 jobs in New York, according to the Trucking Association of New York.
Miller said increased trucking costs can move through the supply chain and eventually reach the consumer.
For home heating-oil customers, the price swings come as colder weather approaches.
Todd Danz, president of Family Danz Heating and Cooling, said the company’s price for heating oil was around $4 a gallon or slightly below it one or two months ago. He said it climbed to the low-to-mid-$5 range this week and fluctuated by nearly 30 cents per gallon over the course of several days.
“Even if you go back a month or two ago, we were around four dollars a gallon, maybe a little under,” Danz said. “You go to the middle of this week where, you know, low to mid-$5 a gallon. And really, just this week alone, the price fluctuated almost 30 cents a gallon.”
Danz said customers have begun calling as they weigh whether to fill their tanks, lock in a price or use a budget plan before the heating season. He advised customers not to panic as prices move.
Experts cautioned that the conflict is not the only driver of fuel costs. Seasonal demand, refinery operations, regional distribution, fuel inventories and changes in global crude-oil markets also shape what New Yorkers pay.