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			<h1 class="singlePageTitle">Tensions in Iran affect oil prices in America</h1>

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			<p><em>by Skylar Brown<br />
Staff Reporter</em></p>
<p>Growing tensions over Iran&#8217;s nuclear program led to an oil embargo on the country by the European Union, which has contributed to increased gas prices for Americans.</p>
<p>It is believed that Iran has made significant advances in their nuclear program, raising concerns in Israel, who has stated that if threatened, it would respond with a pre-emptive strike. If hostilities broke out in the region it would affect the strait of Hormuz in the Gulf, through which roughly 20 percent of the world&#8217;s oil flows.</p>
<p>With Iran having the world&#8217;s fourth largest oil reserves, 137 billion barrels, the embargo has put a strain on many countries and affected the global oil market. While the reduced import of Iranian oil by the European Union (EU) has affected the global price of oil, the more pressing issue for economists and oil traders is the possible closure of the Strait of Hormuz, which would interrupt global oil supplies.</p>
<p>If Iran were to be removed from the global oil market, the gap between global supply and demand would increase sixfold, according the U.S. Energy Department. The fear of this potential gap in supply and demand has contributed to the rising gas prices at the pump.</p>
<p>Crude oil is currently trading at 10-month highs; as of March 4, gasoline prices were up for the 26th straight day, averaging $3.76 a gallon nationwide. Some analysts also believe that the price of gas could reach $5 a gallon this summer.</p>
<p>&#8220;The amount of oil we drill at home doesn&#8217;t set the price of gas by itself,&#8221; President Obama said. &#8220;The oil market is global. Oil is bought and sold in a world market. And just like last year, the single biggest thing that&#8217;s causing the price of oil to spike right now is instability in the Middle East&#8211;this time, around Iran. When uncertainty increases, speculative trading on Wall Street increases, and that drives prices up even more.&#8221;</p>
<p>The president is able to ease the pressure of rising gas prices through two methods, release oil from the Strategic Petroleum Reserve and limit the ability of &#8220;speculators&#8221; to drive up the price of oil in the futures market.</p>
<p>Obama has already utilized both of these options, limiting the impact he can have in reducing the financial strain of Americans at the pump. The rising price of gasoline has put pressure on the president to intervene in Iran.</p>
<p>Both Israel and the United States have not ruled out a military strike on Iran, in order to impede its nuclear program and to ensure stability within the region.</p>
<p>President Obama stated, &#8220;You know there are no quick fixes to this problem.&#8221;</p>
<p>With such a delicate situation in the Middle East and no easy solution, there appears to be no immediate end to the rising prices of gas for Americans.</p>
<p>&nbsp;</p>
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