News In Brief

What will the oil spill mean for gas prices?

Daryl Paranada Jun 8, 2010

Easy answer: Short term, nothing. Long term, it all depends.

By Adriene Hill

Those of you still driving SUVs can rest easy, for the time being. The amount of oil spilling into the Gulf is insignificant when you’re talking supply and demand (the environment is a different story). Prices won’t jump in the short run, according to Tom Kloza from the Oil Price Information Service.

It’s the intermediate and long term that gus-guzzler-lovers may need to worry about.

According to Chris Dillman from Tradition Energy, there a chance that the oil spill could interfere with shipping lanes — disrupting the ability of tankers to get crude oil to refineries.

In the long run, the spill could slow the growth of offshore oil exploration and drilling — which could have significant price impacts. Kloza says future regulations could slow the pace of growth of offshore drilling and push prices up after 2010. Dillman thinks any move to slow offshore drilling will be short-lived; the desire for domestic oil supply and the jobs that go with it will quickly trump any concerns about dead birds and oysters.

(Dillman’s prediction is already coming true in Louisiana. Check out Governor Bobby Jindal’s letter challenging the deepwater drilling moratorium.)

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.