Oil prices tick higher (CL=F, BZ=F) as Hurricane Milton makes landfall in Florida and amid ongoing geopolitical tensions in the Middle East. Andy Lipow, president of Lipow Oil Associates, joins Morning Brief Hosts Seana Smith and Brad Smith to discuss his outlook for the oil market.

“The oil market is pricing in a greater probability of a war between Iran and Israel that would result in a supply disruption. And I should point out that since last year, when Hamas invaded Israel, there has been no oil supply disruption. But prices recently have been rising of a fear that one might happen,” Lipow tells Yahoo Finance about recent surge in oil prices.

He explains, “It's difficult to predict where the oil market is going to go. On the one hand, it could spike higher if we were to see something like the Strait of Hormuz being shut. But on the other hand, there's more than adequate oil supply in the market. And you couple that with [Organization of the Petroleum Exporting Countries] OPEC deciding to restore some of its production cuts in December means that the oil market is being weighed down. I think that overall, absent hostilities in the Middle East, you will see oil trade below $70 once again in the next few weeks.”

As Hurricane Milton hits Florida hits the region, which is still recovering from the devastation of Hurricane Helene, Lipow indicates there may not be a notable effect on the oil market. “The impact on the refining industry on the US Gulf Coast was minimal for Hurricane Helene. We did see some oil production shut-ins in the Gulf of Mexico that were restored very quickly. And for Hurricane Milton, what I would tell you is that the production impacts and the refining impacts were negligible.”

Lipow says, “The biggest impact in the oil industry is really on the supply and distribution of gasoline and other refined products into Tampa and we'll have to wait and see whether any of those terminals along the waterfront there were damaged. But meanwhile, we already have tankers who have loaded gasoline, making their way into the Miami area. So resupply is going to happen. It's [a question of] whether the infrastructure, the power grid, and employees being available are going to be able to distribute that gasoline to the local retail service station.”

He outlines, “If the terminals are okay, then you could start seeing resupply show up as early as Sunday, maybe possibly Saturday night. But you need these other steps to be put in place before the tankers can actually show up at the terminal. Assuming the terminals do have power, we'll be able to start loading gasoline actually, almost immediately because those terminals never empty their supply prior to the hurricane. You don't want those tanks being blown off their foundations. So you need refined products to stay in the tank.”