Higher oil prices as a result of sanctions on Iran could make it harder for Americans to pay their home heating bills this winter, the federal government said Wednesday.
The Energy Information Administration said in a report that it expects heating oil prices to be higher this winter than in 2017 because of higher global crude oil prices, driven up in part by market unease over U.S. sanctions on Iran kicking in Nov. 5.
The agency forecasts that the Brent crude oil price, used in determining U.S. petroleum product prices, will average $79 per barrel this winter, which is $15 per barrel higher that last winter.
"Higher forecast Brent crude oil prices this winter are the result of gradually tightening global oil balances and concerns about potential supply disruptions in the coming months," the agency said.
A big chunk of the Northeast relies on home heating fuel for space heating, from Washington, D.C., to Maine. Although more are switching to natural gas and electricity to heat their homes, the percentage of heating oil users remains higher than the rest of the country.
How the price ultimately affects consumers will depend on a number of factors, including changes in crude oil prices that are "highly uncertain." There is also the variable of weather and how cold it will actually get in the 2018-2019 winter.
The National Oceanic and Atmospheric Administration predicts that temperatures will be only 1 percent colder than last winter on average for most of the country.