Israeli Warplanes and Middle East Conflict Cost You Money at the Gas Pump

When rockets were launched from Lebanon into northern Israel, the Israeli reaction was both predictable and prompt. Lebanon was hit with a massive air, land and sea assault that continues as of this writing. Now, whatever your opinion regarding Israel, the one thing that cannot be said is that the Israeli attack was without provocation.

There was also one other very predictable reaction on the world scene: The price of crude oil hit better than $78 per barrel and predictions this morning are that it will go as high as $80. Since the Israeli assault shows no signs of slowing down -and won’t as long as the Hezbollah guerrillas continue to launch new rockets into Israel- $80 a barrel as a stopping place is nothing more than a slim hope at best. How far will the price go? Your guess is as good as mine. It probably depends on how widespread the fighting becomes and how long it lasts. However, $90 – $100 a barrel may not be unreasonable.

But there is also another truth. As long as the price of crude continues to rise, the price of gasoline will rise right along with it. In Ft. Worth, Texas, unleaded regular is already selling for $2.89 – $2.95 at most stations. Once in a great while you’ll find it a little cheaper, but not often. Keep in mind, this price range was before the Israeli response and while crude was going for $75 a barrel. When the impact of this current conflict trickles down to the gas pumps (anywhere from today to a week from now), I wouldn’t be at all surprised to see unleaded regular at $3.05 to $3.15 at the very least. And it will probably continue to climb for a while.

Also, it isn’t just gasoline that’ll be costing us more. As I’ve discussed in past posts, the world economy is based on oil. Petrochemical feedstocks are used is everything from plexiglas to prescription drugs. Our society literally could not exist without crude oil. Stop and think about it. Packaging of almost everything uses oil in one way or another. Plastic bags are now standard in grocery stores to the point that the old fashioned brown paper grocery sacks are virtually impossible to find. Syringes, fabric, sterile packaging, computer cases, keyboards, ballpoint pens and on and on. Almost anything you can name is connected to oil. All of their prices are going up.

Can we gradually wean ourselves from oil dependence? In some ways, maybe. But change totally from a petroleum based economy while maintaining the standard of living we have today? I doubt it. Even if it could be done, it would take many decades if not a century or more.

Basically, we’re stuck. While we work at developing ways to reduce our dependence on oil, we will still have to find a way to survive in a world where the price of crude oil can change as much as $3 – $5 a barrel overnight because radical guerrillas decide to launch a surprise rocket attack on a nation that they hate.

There is a solution to all this, of course, but it’ll never happen. The solution? Peace.