The national average price for regular gasoline has hit $4 per gallon again, primarily due to the renewed conflict with Iran and the ongoing Ukraine-Russia attacks that are rattling energy markets. This marks the first time the national average has been at $4 or higher since June 17.
Oil Price Surge
On Friday, U.S. crude oil settled at $82.49, while international Brent crude oil closed at $88.10. The prices of gas had fallen in recent weeks to as low as $3.79 on July 7 and 8 but have been trending higher over the last two weeks due to the daily exchanges of attacks between Washington and Tehran in a battle over the crucial Strait of Hormuz.
Oil prices began rising again after the U.S. revoked a sanctions waiver on Iranian oil on July 7. One day later, President Donald Trump announced that the ceasefire with Iran was “over.” Days later, oil prices climbed after Trump announced that he was “reinstating the Iranian blockade” in the Strait of Hormuz.
Global Impact
The struggle for control over the Strait of Hormuz, through which 20% of the world’s energy supplies typically transit on their way to global markets, is central to the current situation. According to JPMorgan Chase commodities analyst Natasha Kaneva, Tehran appears intent on establishing authority over navigation itself through mandatory transit protocols and transit fees.
The back-and-forth is hardening into a standoff over who controls the Strait, and has abruptly stalled the traffic recovery that began in early June. Last week, ship crossings in the strait dropped to a three-week low, according to data from MarineTraffic and Kpler.
Developments in the Russia-Ukraine war are also playing a role, with Russia banning exports of key refined products until the end of July. This, combined with the existing restrictions on most shipments of gasoline and jet fuel, has led to less supply and more demand in the global market.
Original reporting: NBC10 Boston — read the source article.
