Amid the escalating crisis in Iraq, gas prices in the Bay Area have been on the rise and are likely to stay high or spike even more until the conflict between that country's government and rebel forces is resolved.

After declining 13 cents over the past two months, prices for gasoline in the Bay Area have gone up over the past week by about 2 cents a gallon, according to figures from the website Gas Buddy, and average $4.14. While the increase is small, the higher prices have arrived at a time when drivers normally enjoy a respite from higher gas prices.

"There is no question Iraq is driving up prices," said Gregg Laskoski, a senior petroleum analyst with Gas Buddy. "Brent Crude, West Texas Intermediate, Alaskan oil, North Sea, all those oil prices are going up, and that's affecting gas prices."

While prices flattened Thursday, if the warfare in Iraq persists or intensifies, especially if the country's key refinery falls to the insurgents, gas prices could march higher again, analysts with Gas Buddy warned.

And a resolution of the battle in Iraq might be the only event that would drive crude oil prices lower and help ease the rise in gasoline costs.

"Until there is greater clarity about what is happening in Iraq, what is happening in the oil fields there, you won't see crude oil prices come down significantly," Laskoski said. "Prices could stay significantly high for weeks, maybe longer."

The average price of gasoline is $4.09 in Santa Clara County, $4.10 in the East Bay and $4.22 in the San Francisco-San Mateo-Marin region.


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At this point, analysts don't foresee a devastating spike in gas prices, unless the conflict becomes far more destructive.

"You would have to see a major disruption to Iraq oil exports," said Patrick DeHaan, a senior petroleum analyst with Gas Buddy.

Since it's unclear how long the crisis will last, it's also not clear how significant the impact of the price increase will be.

"In the short term, you can expect conservation in the use of gasoline, and there will probably be a lower budget for other things," said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast. "In the longer term, our past experience with permanently higher gasoline prices is people buy more fuel-efficient vehicles or they use more public transit."

Still, some drivers in the Bay Area said Thursday that gasoline prices have already crimped their spending power.

"It definitely cuts into my budget," said Caleb Byrum, a Gilroy resident who was interviewed Thursday at a gas station in Fremont. "I can't go out to dinner as much, I can't drive over to see my girlfriend as often. It has an impact."

Byrum also said he is concerned that gasoline prices will become even more of a spending burden if new government taxes are imposed on consumption of the fuel.

This week, two U.S. senators proposed bipartisan legislation to increase gasoline and diesel fuel taxes for the first time in two decades to pay for highway and transit programs. The measure would add 12 cents a gallon to both the 18.4-cents-a-gallon federal gas tax and the 18.4-cents-a-gallon diesel fuel tax.

Bill Bailey, a Fremont resident, says he has cut back on spending on discretionary items because of gasoline costs.

"I don't go out to eat as often, I don't go to the movies," Bailey said. "Iraq will cause prices to go up. But they will use any excuse to raise prices."

Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.