Gas prices in Georgia increase after U.S.-Iran ceasefire breaks down

In Georgia, prices on Tuesday were up two cents per gallon compared with this time last week, but De Haan cautioned it’s just taking some time for the oil surge to show up at the pump. Prices for gasoline and diesel could rise anywhere from 10 cents to 25 cents over the next week, according to De Haan.

“I don’t have a crystal ball on how long it will last, but generally speaking, as the situation continues to evolve, as long as there are more escalations and attacks, oil prices could continue advancing until there are solid signs of de-escalation,” he said.

The U.S. and Israel launched their first attacks against Iran at the end of February, sending gas prices soaring as the hostilities halted shipping traffic through the Strait of Hormuz, the vital waterway through which about a fifth of the world’s crude oil and natural gas travels.

In June, the U.S. and Iran signed an agreement to stop the fighting, allow ships to pass through the strait and lift an American blockade of Iran’s ports. Global oil supply had a “sharp” rebound last month, according to a report from the International Energy Agency, and prices fell.

But last week, the U.S. and Iran traded attacks as the ceasefire collapsed. On Monday, President Donald Trump said he would reinstate the blockade, take control of the strait and charge ships passing through it a 20% fee. He later reversed the decision to charge a fee.

When gas prices surged in the initial round of fighting, Georgia Gov. Brian Kemp suspended the state’s gas tax from late March until early June. His office did not respond to a request for comment on whether the governor would suspend the tax again.

The resumption in fighting is happening at the same time that Ukraine has increased its attacks on Russian oil refineries, causing a shrinking global supply.

“That’s kind of the silent part of the story that I see very few people talking about,” De Haan said. “Refining capacity is finite, and Ukraine has attacked one of the world’s largest exporters of energy.”

Russia is temporarily banning the export of diesel until the end of July.

For Mercedes E. Smith, the rising costs at the pump over the past few months have directly affected her bottom line.

Credit: Handout

Credit: Handout

Smith is the CEO and founder of Atlanta-based Luxury Levels Transport, a white-glove transportation company. She has access to more than 100 luxury Mercedes-Benz Sprinter vans, which take only diesel fuel.

When prices soared in the spring, Smith absorbed the costs because many clients had booked months in advance, when gas prices were lower, and she didn’t want to spring a sudden cost on them.

“I have to make the executive decision: Do I go up or do I stay?” Smith told the AJC.

“It does impact us, no matter what, because someone has to pay for it. And because I want to make sure my clients are happy, I’m wanting to absorb it,” she said.

She’s been able to weather the diesel volatility through savings and working to retain her clients.

“We just have to work a little bit harder,” Smith said.