Oil prices rise & fall rapidly, gas prices soar

Added: 2026-05-12

[00:00:00]Oil and gas prices are once again showing minor movements as the ceasefire in Iran holds on after recent attacks.

[00:00:08]Brent crude is fluctuating roughly around $100 a barrel after rising and falling rapidly within the past 2 months. And AAA is reporting the average price of gas here in Ohio is around $4.71 a gallon. Experts say crude oil investors are trying to determine when the war in Iran will end. So, here with more on what we're facing as this drags on, the chair of the School of Business at Westminster College, Dr. Bob Bedellski. Bob, thank you so much for taking the time. Thank you for having me. Of course. So, how high have we seen Brent crude oil rise since this war began? And what causes those prices to fluctuate so rapidly?

[00:00:51]Well, it's it's rising and falling as as we kind of all see. Um but what really happens is the oil is traded on a world commodity.

[00:01:01]And when something happens in the world, then you know, with like this thing with Iraq right now, it fluctuates the whole the whole system. So, I I look at it this way.

[00:01:12]When, you know, I I look at it like if you're ever in a car accident, you, you know, slammed on the brakes and you really reacted to that car accident. And then the next time you drive, you're kind of a little bit slow to get back to normal and you're slow to get back to normal. So, that's kind of like how the oil the oil market goes. It It reacts quickly and then it's kind of slow to get back to normal. And I wonder, have we seen prices climb this high for Brent crude before? Or is this some of the highest we've ever seen?

[00:01:42]It's been up to about $125 a barrel. So, it's it's been up there before. We've We've seen in different areas. Um and normally it comes back down. Normally it's something going on in the world. It's It's normally some sort of conflict. Uh last time we saw something like this that that happened specifically was when Russia invaded Ukraine. So, when all that stuff happens, the world doesn't know kind of what to do, and then they kind of react in the worst possible way, which is to raise prices. And how have oil companies been responding to the situation in the Strait of Hormuz and all of this uncertainty?

[00:02:18]Well, they don't know what to do either right now. So, it's the the oil producers who are pulling the oil out of the ground are perfectly fine. Their costs haven't go gone up or nothing's happened, but what's happening is in the supply chain when you don't really know if you can get your ships through and how many ships you can get through, then, you know, markets have a bad reaction to that, and that's why prices are arising.

[00:02:43]And we saw a major jump in gas prices just this past week. How are gas prices affected by the oil futures, and how do they get word that it's time to raise those prices on the gallon?

[00:02:55]Well, what what happens is when there's any uncertainty like there is now in the Strait of Hormuz, yeah, they react in the like I said, the kind of the worst possible way. So, then they, you know, kind of work up to a higher price um trying to figure out what's going to go on.

[00:03:13]Um it's it's a theory it's an economics theory called rockets and feathers where when something goes on, it, you know, the prices shoot up like a rocket, but then after that conflict or whatever it happens goes away, it kind of comes down like a feather very slowly. So, that's kind of what's happening right now. I think we're in the rocket stage right now where nobody knows what's going on, nobody knows how much oil is going to be available, all those kinds of things.

[00:03:38]And now, you know, we're we're kind of waiting, and it'll it'll come down eventually, but it's going to come down much slower than it went up. And if the war in Iran does come to an end, can you kind of explain why gas prices won't instantly fall if the strait ends up reopening.

[00:03:55]Sure. So, they are they are on that speculative market and that speculative market is is never really rebounds as quickly as it goes back up.

[00:04:04]So, we're going to be waiting for a while and they're going to be eking prices down a bit to make sure that everything is okay and that's why they they kind of do that. They may want to make sure everything is okay everything there's no more fluctuations in the market and then they'll slowly kind of bring prices down. How much worse could it get when it comes to oil and gas prices or do you think we might have plateaued?

[00:04:27]I I wish we had plateaued we had plateaued but I think if if this Iran conflict gets any worse and other countries start to get involved, I think we can really see, you know, gas and oil prices, you know, really raise into maybe the 550 area maybe $6 depending on how long this goes on. The OPEC nations are not producing any more oil right now than they have been in the past because then if they produce more oil and this all goes away then there's going to be a glut so then prices are really going to fall fast so they don't want that to happen either. So, there's a lot of uncertainty in the markets and that's what's causing a lot of this fluctuation. Yeah, definitely something we'll have to keep an eye on. Dr. Babadoski, thank you so much for your insight. Thank you. Have a great day.

[00:05:10]You as well.