CHEYENNE, Wyo. (Wyoming News Now) -- Iranian General Qasem Soleimani was killed last week, which could have an impact on Wyoming’s economy. Jim Robinson, with the Wyoming Economic Analysis Division, said the first thing that he expects to see after this sort of conflict is a spike in crude oil prices. Robinson said that's what we're seeing now. In the past few days, crude oil prices increased by about four dollars a barrel. “The uncertainty, though, is how long does that stay around and impact the market?” Robinson said.
Robinson said if the spike in price only lasts a couple of days, there isn't much to be concerned about. Robinson said that's what happened in September 2019 when two Saudi oil installations were attacked by drones. When it comes to the death of General Soleimani, “There’s also a notion out there that this might be the beginning of an ongoing back and forth between two countries,” Robinson said.
Robinson said, overall, crude oil prices are a positive story. If the current conflict in the Middle East continues to keep oil prices high that could lead to more oil production and -- as a by-product -- more natural gas production. “More gas production now, when we have a pretty stable market just means that we’re going to see downward pressure in the natural gas prices. That’s going to hurt Wyoming,” said Robinson. He adds that cheaper natural gas prices also mean more utilities may shift from using coal to natural gas furthering the impact on the State’s economy.
And if you think that the natural gas industry doesn’t have as much of an impact on the state as coal or oil, Robinson pointed out that since 1999, natural gas has brought in more mineral severance taxes each year from 2000 until 2014. In 2015, the amount paid by natural gas industries began declining and is now behind oil, but currently above coal. These taxes collected by the state are based on production in each industry and change year after year. More information can be found in the current Consensus Revenue Estimating Group (CREG) report that was released in October 2019. For the full report, go to http://eadiv.state.wy.us/creg/creg.html.
Robinson said you could see a change at the pump of about 10 or 15 cents fairly quickly. That’s a change in price he's noticed in the past.