How global tensions affect gas prices for students, residents

Sofia Oganezova

Staff Writer

The effects of the ongoing war are being felt far beyond the Middle East, including at gas stations across the United States. For many students at WCC who commute to campus, fuel costs could mean tighter budgets and increased attention to global events shaping the price of gasoline.

After the closure of the Strait of Hormuz, gas prices in Michigan surged to some of their highest levels in years. According to recent reporting from AAA, the statewide average has climbed to about $4.08 per gallon, more than a $1 higher than a year ago, with some stations charging $5 or more. 

Owen Fleming, an economics professor at WCC, said Iran’s geographic position gives it influence over global oil supply.

According to Fleming, the Strait of Hormuz, which sits near Iran, is one of the most important locations in the global oil trade. A significant portion of the world’s oil supply passes through this narrow waterway each day. Because of this, instability in the region can quickly influence global energy markets.

“Iran isn’t actually a huge producer of oil, but geographically they control the Strait of Hormuz, which channels oil from the Middle East to the rest of the world,” Fleming said. “Because of that, they have a lot of bargaining power when it comes to global oil supply.”

According to U.S. Central Command, the U.S. has fully implemented a blockade on Iranian ports, cutting off international sea trade that supports about 90% of Iran’s economy. The move comes as the White House continues to signal interest in a diplomatic situation, with talks on possible negotiations still underway.

On April 17, Iran reopened the Strait of Hormuz, which resulted in an immediate 9% drop in oil prices, according to reporting from the Associated Press. 

However, the reopening was short-lived, and according to WILX reporting, continued conflict and the risk of an extended blockade have kept prices rising, with some Michigan gas stations nearing $5 per gallon.

“Even if there isn’t direct conflict, tensions alone can affect prices,” Fleming said. “Iran is able to influence the supply of oil through the Strait of Hormuz, and even the threat of disruption can move markets.”

Some students have a basic understanding of these factors, often connecting gas prices to transportation and supply challenges.

“I think it has to do with how much it costs to get it into the country,” said Camden Ballance, a WCC student majoring in math and science.

According to the U.S. EIA, roughly 20% of the world’s liquefied natural gas also passes through the strait, making it a critical route for global energy supplies. The waterway is also used to transport commodities such as fertilizer, which is essential for agriculture. Any disruption to shipping in the region can raise energy and transportation costs, ultimately increasing food production expenses worldwide.

Many students at WCC rely on personal vehicles to commute to campus from across Washtenaw County and nearby communities, meaning changes in gas prices quickly affect their weekly expenses.

“For students taking classes in person, gas is literally the cost of coming to school,” Fleming said. “When prices rise, it becomes another expense students have to factor in. If gas prices stay high for a long time, it wouldn’t surprise me to see more students choosing online classes. The cost of commuting becomes another factor in those decisions.”

Students say they have felt the impact in their daily lives.

“I have to drive a long way to school every day, so higher gas prices mean I’m spending more just to get there,” Ballance said.

These increased prices can affect students’ budgets, which might already be stretched thin.

“Well, for me personally, I don’t get paid that much, and it’s taking more out of my paycheck,” said Chloe Salanta, a WCC student majoring in math and science.

Events in the Middle East may seem distant, but they can have real economic effects locally. Fuel prices also impact grocery items and others good that need to be transported across the country, Fleming said.

“Oil affects the price of almost everything,” Fleming said. “Even something as simple as buying gum involves transportation that requires fuel, so higher gas prices eventually affect the cost of everyday goods.”

For some students, global events only become noticeable when they begin affecting everyday expenses.

“If gas prices keep going up, I would definitely consider taking more online classes,” Ballance said.

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