Just as Russia’s invasion of Ukraine in 2022 drove oil prices higher — over $100 a barrel for several months — so too will the U.S. and Israeli attacks on Iran, and Iran’s counterattacks, send prices upward.

Higher oil prices mean more money for the Alaska state treasury. After the annual draw on Permanent Fund earnings, the money from oil taxes and royalties, which are based on price per barrel and production, are the second-largest deposit to the state checkbook. Every other taxpayer is so small as to be a drop in the barrel.

Legislators this month are working to craft a spending plan for the fiscal year that starts July 1. They will work March and April putting together the pieces, then trading and negotiating and making decisions before their mid-May adjournment deadline.

No question there is a long list of projects, programs and proposals for spending any additional oil money. This is Alaska, where we like to spend almost as much as we like to fish, count airline miles and talk about how the wet cold of Southeast is worse than the dry cold of Fairbanks.

Going into the session, Alaska North Slope oil prices were flirting with $65 a barrel, maybe just barely enough to fully cover next year’s spending on public services and a $1,000 Permanent Fund dividend, but short several hundred million to cover this year’s budget gap. The outlook for any additional funding for education — even with increasing school closures, staff cuts and larger class sizes — and every other public service need on the list looked bleak.

But as of last week, prices were back over $70, and with the weekend’s outbreak of war in the Middle East, oil climbed on Monday to the high $70s. Analysts expect prices could keep climbing until there is peace and oil shipments return to normal in the region. And that could take time. Prices could easily reach $80 or more before coming back down.

Looking at the Alaska Department of Revenue annual forecast book, the difference between $65 a barrel and $80 a barrel over an entire year is about $500 million more to the state treasury. Or, thinking more short term, about $40 million a month to the state.

The point being that Alaska is about to see more money coming in than it had expected a week ago. But how high it can go and how long it can last is guesswork. That’s why caution is important.

In spring 2022, when oil prices shot up to $120 a barrel, the state treasury was looking pretty fat to legislators — and voters — in an election year. The Legislature, with the governor’s support, spent more than $2 billion on an extra-large PFD of $3,284 per person — almost double the spending on K-12 public education. They called part of it, $662, “energy relief,” intended to help Alaskans pay more expensive bills for gasoline and heating fuel that accompany rising oil prices.

It’s an election year, and oil revenues to the state now look to be higher than expected. Which means there will be heightened interest in using some or much or most of that money to fatten the PFD for this fall.

But Alaska could see longer-term benefits from the short-term influx of dollars if the money goes toward schools, the university, job training, roads and harbors, foster care, child care and elder care.

The dividend is one option, but it shouldn’t be the first option.