NASHVILLE, Tenn. (WTVF) — Iran's blockade of the Strait of Hormuz has sent fuel prices surging across Tennessee, with regular gas up approximately $0.40 and diesel up $1 in just one week, according to AAA.
On Thursday, the average price of regular gas in Tennessee was $3.225/gallon, and diesel was $4.809/gallon.
One-fifth of the world's oil supply passes through the Strait of Hormuz, where Iran has been attacking commercial vessels amid ongoing regional conflict. Tankers have come to a standstill after Iran threatened to attack any ship attempting to pass through.
"The ships are such high-dollar items. The ship owners are not going to risk putting a ship through there with sailors who could potentially be killed," said Andy Borchers, Professor of Management at Lipscomb University.
Supply chain experts say the disruption could be the largest since the 1970s energy crisis.
"If it's a matter of days, it won't be damaging, but if it goes on for days or weeks, it could be very damaging," Borchers said.
With diesel edging toward $5 a gallon, the impact is being felt far beyond the gas pump.
Organizations like Goodwill Industries of Middle Tennessee, which fills up 16 tractor-trailers every few days, are feeling the strain. A single fill-up now costs nearly $500.
Leisa Wamsley, Goodwill Industries of Middle Tennessee's Chief Operating Officer, said the organization closely tracks its fleet expenses year-round.
"We talk and monitor gas prices even when they're not at this level," Wamsley said. "So we monitor how much we're getting per gallon, how much we're spending, we monitor our miles, how many miles are we spending this year compared to last year, so we're monitoring it all year long because part of what we have to do is be good stewards of our finances."
Supply chain experts warn the financial pressure is compounding quickly. Oil prices have already climbed from $70 to $100 a barrel and could rise further.
"Oil is a commodity; it's traded worldwide. Every dollar of oil is $0.025 at the pump. Right now, oil went from $70 to $100, it may go up to $120, and how long it stays up there, we'll see gas prices hit us pretty bad," Borchers said.
For Goodwill Industries of Middle Tennessee, which is funded by donations and trucked goods 106,000 miles in February alone, every dollar spent on fuel is a dollar taken from its mission.
"Any time we are having to spend those costs, that means it's less money for our mission," Wamsley said.
The organization is reluctantly preparing for the long haul as the crisis shows no signs of easing.
How are surging oil prices affecting you? I want to hear from you. Email me at Hannah.McDonald@NewsChannel5.com.
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