Gas prices are climbing and financial markets are sliding as intensified fighting in the Middle East disrupts global oil supplies and fuels uncertainty among investors.
Bombing across the region has escalated in recent days, and the instability is being felt on Wall Street. Stocks were sold off on Tuesday as traders reacted to the conflict.
So what’s the best course of action for everyday investors? We asked Erasmus Kersting, chair of the Villanova Economics Department.
READ MORE | Dow closes down 400 points as Iran war escalates
“Not to overreact is generally always good advice,” said Kersting.
Supply chains have stalled after Iran vowed to target any ship traveling through the Strait of Hormuz.
“Right now, those tankers are stopped. Some of them have even gone under attack. So there are serious problems with the supply of oil,” Kersting said.
Drivers across the region say they are already feeling the impact. “Definitely noticing it. It’s rising up and up. It’s not coming down at all,” one customer said at a Wynnefield gas station.
AAA reports that prices have surged overnight: up 8 cents per gallon in Philadelphia, 10 cents in New Jersey and 13 cents in Delaware. The national average now stands at $3.10, an increase of 11 cents since Monday.
SEE ALSO | War with Iran: Crude prices jump as experts warn of possible rise at the pump
Higher fuel costs are expected to ripple beyond the pump.
“Almost anything that we buy gets transported by trucks and trucks do still run on diesel,” Kersting said.
Heating oil prices have also spiked as the conflict continues.
Brent crude jumped another 8% overnight to $84 a barrel.
“Either way, I’m still putting 10, 20 dollars in, but less gas for what you’re putting in,” said Nestito Diaz of South Philadelphia.
President Trump said he expects the fighting in Iran to continue for another four to five weeks.
Officials and analysts say they will be watching closely to see how long the economic effects continue to build.
