U.S. gasoline breaks $4 per gallon, up more than 30% since the Iran conflict

Gate News Update: U.S. gasoline prices have risen above $4 per gallon for the first time since 2022, with the national average reaching $4.018. The Middle East conflict has disrupted shipping through the Strait of Hormuz, affecting about 20% of the world’s oil supply and triggering a historic supply interruption. Since the U.S. and Israel carried out strikes on Iran in late February, gasoline prices have surged by more than 30%. Diesel prices have even surpassed $5 per gallon, up by more than 40% from before the conflict, putting pressure on logistics transportation and household spending.

The American Automobile Association (AAA) says that both Brent crude and WTI crude prices have hit their highest levels in nearly three years. It expects that the average gasoline price in March will rise 25% compared with February, the largest monthly jump since 1990. David Doyle, chief economist at Macquarie Group, said this will significantly increase inflation pressures. Andy Lipow, president of Lipow Oil Associates, warned that the impact of rising diesel prices will gradually filter through to retail and transportation over the coming months.

To help ease fuel prices, the U.S. Environmental Protection Agency (EPA) is temporarily lifting some E15 gasoline sales restrictions and plans to increase diesel supply. Energy Secretary Chris Wright said he will step up market releases. Vice President John D. Vance pledged that the surge in oil prices is temporary and will fall after the war ends. In addition, the U.S. will release 172 million barrels of crude oil from strategic petroleum reserves and waive the Jones Act for 60 days to allow foreign vessels to transport fuel, easing some transportation pressure.

Analyst Patrick De Haan noted that if the Strait of Hormuz remains closed, gasoline prices could climb further to $5 per gallon, and consumer and business costs will continue to be under pressure. In the short term, Americans may feel multiple shocks across areas such as fueling, logistics, and aviation, and the energy market remains highly uncertain. (CNBC)