Iowa State University economist Dave Swenson says it’s due to the international price war between Saudi Arabia and Russia. “What’s happened is the Saudis have increased the amount of oil that they’re selling worldwide,” Swenson says, “and they’re able to produce oil much cheaper than anywhere else in the world.”
Crude oil prices are significantly lower, down about 60 percent compared to a year ago. Swenson says it’s too early to see the full impact of the COVID-19 outbreak on gas prices.
“If we have people now actively not just social distancing, but moving more toward quarantine and staying in place that, too, is going to mean a lot less demand for fuel,” Swenson says.
While state officials calculated $2-a-gallon as the statewide average on Wednesday, some stations in Iowa had significantly lower prices. GasBuddy — the Boston firm that tracks prices at more than 140,000 U.S. outlets — reported a station in Elkader was selling gas for $1.45 a gallon yesterday. Prices were in the $1.60 range in the Sioux City and Cedar Rapids/Marion areas.