The recent conflicts between Israel and Iran have put the energy industry on high alert. Causing a surge in oil and gas prices including the US and potentially in Israel. Predicting a rise of 10 to 20 cents for gasoline and 15 to 25 cents for diesel in the US, and if the conflict between Iran and Israel escalates, it will rise even more.
Unfortunately North Dakota oil and gas industry is feeling the hit. Israel has already shut down some of its offshore natural gas fields due to the conflict, reducing supply.
Justin Kringstad with the North Dakota Pipeline Authority says North Dakota is an “oil price taker,” meaning the state lacks the power to influence the price of oil and must accept the market price determined by global supply and demand.
“The industry then has to make decisions based on what oil prices are doing – what they are going to choose to do as far as activity levels, production levels. And so certainly what’s happening at the global level has a direct impact to us here in North Dakota,” said Kringstad.
The price of North Dakota crude oil is currently hovering around $61 per barrel.
- Geopolitical tensions between Iran and Israel are having an impact on global energy markets, which indirectly affects North Dakota oil prices.
- The US government has implemented “maximum pressure” sanctions against Iran, aiming to limit their oil exports and reduce revenue.
- These sanctions target Iran’s ability to trade oil, particularly exports to China, and involve measures like designating entities involved in the oil trade and disrupting “shadow banking” networks used to evade sanctions.
- There is no indication of direct Iranian investment or operations in the Bakken Formation in North Dakota. The list of active companies and lease operators in the Bakken does not include any Iranian entities.
image by Vahid Salemi/AP
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