The national average price for gasoline in the United States passed the $4 per gallon mark on Monday as the conflict in the Middle East continues to escalate. Later in the day, prices retreated slightly, to stand at $3.950 per gallon, according to GasBuddy, and $3.990 per gallon, according to AAA.
“Gasoline and diesel prices continue to climb to multi-year highs as the effective closure of the Strait of Hormuz curtails the flow of millions of barrels of crude oil each day,” GasBuddy’s head of petroleum analysis, Patrick De Haan, said Monday.
“The situation remains highly volatile and unpredictable, but upward pressure on fuel prices is likely to persist as long as global oil supplies are constrained by the continued disruption in the Strait,” De Haan added, forecasting above-$4 prices for gasoline and diesel climbing closer to $6 per gallon unless the situation in the Middle East changes.
“Americans have already spent nearly $8 billion more on gasoline over the past month, a trend that poses growing risks to the broader economy, while surging diesel prices may begin to reaccelerate inflation,” the analyst said.
The fuel price jump in the United States follows West Texas Intermediate topping $100 at the end of last week and staying in three-digit territory as President Trump issued yet another threat to Iran over the weekend, saying the U.S. “will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ‘touched.’”
The threat was followed earlier today by the news of Iran hitting a Kuwaiti supertanker with a drone and setting it on fire. The vessel was fully laden, the Kuwaiti state oil company said, anchored at Dubai Port when it was attacked.
By Irina Slav for Oilprice.com
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