Despite rising crude oil prices and threats to stability in the Middle East, the price of gas is unlikely to reach a national average as high as $5 per gallon in the near term, ExxonMobil’s Chief Executive Rex Tillerson told TODAY’s Matt Lauer Friday.
“As I look at just the supply and demand fundamentals, I would not expect prices to reach that level,” Tillerson told TODAY.
“Again, the unknown in here is the market’s view of the political risk; if the rhetoric gets more heated, if a problem flares up anywhere else in the world, then certainly it could drive these prices up further,” he said.
With the busy summer driving period approaching, many observers are fearful that the price for a gallon of gas, which AAA says is now $3.76 on average across the U.S., could move up to the dreaded $5 mark and derail the economic recovery.
Ongoing conflict in Syria, political tensions between Iran and the West and rising demand for oil from emerging economies such as China are also threatening to push up gas prices.
One source of tension in the Middle East has been concerns over Iran’s nuclear program, which Israel sees as a threat to its existence. If Israel were to attack Iran’s nuclear facilities the impact on gas prices would be “fairly immediate and highly volatile,” Tillerson said.
“It would be largely driven too by what the response was, and whether that resulted in an actual physical disruption of oil to the market.”
Faced with trade embargoes and the possibility of an attack, Iran has threatened to close the Strait of Hormuz -- a strategic shipping channel through which a majority of the Middle East’s oil-producing countries supply the world’s economies with crude oil.