National gas prices continue to soar to nearly $5 a gallon amid political strife centered around the Port of Hormuz.

The roles of speculators and global demand shock have been targeted as the two factors for the recent gas rise in America. Gas prices have not been this high since 2008, when speculation played an essential role. During 2008, speculators were solely liable for the rise of gas prices, as there were no other major factors during the time.

For those not familiar with speculation, speculators bet
on what price a commodity
will reach in the future. These speculations, known as derivation values, are based on value commodity, which is whether an oil barrel will increase in value. Speculators then purchase future derivations or contracts with oil producers, hoping to sell later at the future price. This process can manipulate the market by inflating prices.

However, currently the source may be “the tension in the Middle East,” said Masao Suzuki, professor of economics. “I’m dubious on any impact from speculations, but even if they did, I don’t think that’s what (is) fundamentally driving the prices.”

The tension with Iran has led to threats to close Port Hormuz in retaliation for sanctions. Port Hormuz is where 20-25 percent of the world’s oil passes through. If Iran chooses to close the strait, this could lead to a cut-off of oil supplies, forcing oil transporters to take a longer and more expensive route, which would increase oil prices.

The sanctions on Iran are claimed to form a global unity, while putting a stop to the Islamic republic’s nuclear program. Iran’s rebellion and the threat to Hormuz create this tension between Iran and America, which has led to war talk and war preparation. Consequently, gas prices in America have increased.

High gas prices are putting college students in a difficult position. Skyline student Jacob Gellinger drove a Jeep Grand Cherokee that got 12 miles to the gallon. Gellinger said, “The last time I was at the gas station I paid $80 to fill my tank. I just bought a 97 Volkswagen Passat diesel, so I could run on bi-diesel.”

Julian Dancel, who also attends Skyline, was forced to retire his Mustang and invest in a more gas- efficient vehicle. Dancel is now currently driving a Honda Accord. Dancel said the rumor of gas rising to $5 a gallon by this summer is ridiculous, but this would not stop him from driving.

“I have no other choice,” Dancel said. “I have to be everywhere. I have work, school and my daughter.”