The United States and Israel targeted Iran in coordinated attacks over the weekend. President Donald Trump has said the campaign could take several weeks, the Associated Press reported, raising questions for convenience stores and fuel marketers on how this could affect their business.
CSP asked Denton Cinquegrana, chief oil analyst with OPIS, a Dow Jones Company, six questions on what U.S. retailers should be watching. Here’s what he said.
What are the key facts U.S. c-store and gas station operators should know about what’s happening in Iran?
Currently, the biggest issue is the effective closure of the Strait of Hormuz. The narrow strait is very dangerous right now, so safety, compliance and most of all insurance dictate that ships drop anchor and stay still. I think insurance companies are regrouping and seeing when it's safe to resume transit. Roughly 20% of global oil and product flows traverse the strait.
What are you watching right now as this situation in Iran evolves?
How long does this last? I think that is the critical thing: The longer this takes the more susceptible the market is to bigger moves. The market has been floating up for much of February sort of “pricing in” this event.
What might some immediate and long-term effects be on the U.S. fuel market?
Because this is a global market, the tide lifts all boats. Immediate term retail prices are moving up. The U.S. gasoline average is back above $3 per gallon. This is also the time of year where prices tend to rise with the formulation change from winter grade to summer grade gasoline. This just added some “juice” to the move, making it move back toward say a level $3.11 per gallon a lot quicker than anticipated. Keep an eye on diesel, the world runs on diesel and prices are moving up quickly. I suspect the national average for diesel reaches $4 per gallon, probably by the end of the week, or perhaps early next week. That means it is going to cost more to get items delivered to the grocery store and other retail outlets. That is a cost that is going to be passed on to the end user. Not good when affordability seems to be a buzz word in 2026.
How might this affect fuel supply and prices in the U.S.?
Honestly it really shouldn't. For the week of Feb. 20, the U.S. was estimated to import about 600,000 barrels a day from Saudi Arabia and Iraq. The Saudi barrels most likely went to the Motiva refinery on the Gulf Coast. This does put the U.S. refinery in a unique position. The U.S. has become a significant exporter or refined products over the past decade. This has the potential for the U.S. refiner to be the center of attention as they should be able to meet domestic demand as well as exports.
Do you have any recommendations for U.S. convenience-store operators or fuel marketers?
I think it’s fair to say wholesale prices are going up, and retail will have to do the same. This is likely going to be a period of below average gross rack-to-retail margins. However, if this is resolved quickly, the price of crude oil will drop quickly, products will follow and gross margins will recover lost ground.
What else should U.S. fuel sellers keep an eye on, outside of Iran?
There’s always something to keep an eye on. If the U.S. is distracted with this...what happens with Russia-Ukraine? Does China-Taiwan ramp up? Everything to watch carefully is geopolitical in nature. But overall, I see the U.S. fuel situation as being fine for now.