Uche Cecil Izuora
Motorists in the United States are facing petroleum products price increases as the Iran war continues.
The national average price of gasoline in the United States topped $4 per gallon once again on Monday following the crude oil price rally of the past week amid the renewed hostilities in the Middle East and the fresh de facto closure of the Strait of Hormuz.
As of July 20, the national average price for a gallon of regular gasoline in the United States was $4.0030, according to AAA data.
Prices are now up from $3.8720 per gallon on Monday last week, following a week of re-escalation in the Middle East with Iranian attacks on vessels in the Strait of Hormuz, nine consecutive nights of U.S. strikes against Iran, and Iranian missiles targeting U.S. bases and military assets in America’s regional allies, including Kuwait, Jordan, and Bahrain.
At this time last year, the average price of gasoline in the United States was $3.1410.
But the war in Iran has hiked fuel prices globally, including in the United States.
After a brief respite in late June, when the Strait of Hormuz was tentatively open to traffic and millions of barrels of crude managed to exit the Persian Gulf en route to buyers, oil and fuel prices started to rise again in the middle of July as the chokepoint was closed again and markets returned to price in the war premium.
Last week alone, oil prices jumped by 16 per cent.
As the biggest component in gasoline price formation, the jump in crude prices was expected to translate into a hike in U.S. gasoline prices.
Last week, Patrick De Haan, head of petroleum analysis at GasBuddy, said, “I now expect the national average price of gasoline to reach $4 per gallon in the next 7-10 days, if not sooner.”
On Sunday, De Haan noted that gas prices had declined for eight straight weeks after surging to $4.57 per gallon, “but that decline ended last week and tomorrow will see the 2nd straight week of increase- the average price of gasoline will soon again hit $4, while diesel has again risen above $5/gal