Oil prices surge on Iran Tension; Is $5 Gas Next? image

Oil prices jumped to a nine-month high above $105 a barrel Monday and is expected to go even higher after Iran cut exports to Britain and France, raising worries that higher gas prices may follow suit.

Tehran also is considering extending the embargo to other European countries, a semiofficial Iranian news agency reported Monday.

Iran was supplying more than 700,000 barrels a day to the EU last year but this had already been cut back by 300,000 before yesterday’s move.

U.S. crude for April delivery jumped about 2% to $105.28 per barrel. Prices for Brent haven’t been above $120 for more than a year, and that could prove worrisome for U.S. drivers since many U.S. refineries use imported oil to produce gas, especially on the East Coast.

Prices are already up nearly 9% from the start of the year. According to motorist group AAA, the national average price of $3.56 a gallon marks the 13th consecutive increase.

Unleaded regular averaged $3.96 Monday in the New York City area, up about 20 cents from a month ago. In southern California, drivers are paying an average of $4.07, up 33 cents from a month ago, the AAA data showed.

Question is –Is $5 Gas next?

In addition, oil prices rose briefly on news of the much-awaited bailout deal for Greece while the euro jumped and Asian equities pared losses.

Greece, Italy and Spain are the European countries most dependent on oil imported from Iran.