US gas prices set to rise as Trump-Iran conflict persists
Analysts say gasoline and diesel prices are likely to keep climbing in the United States as the conflict between the United States and Iran continues to disrupt global oil supplies.
Gasoline prices in the United States are expected to keep rising for weeks, possibly months, as the conflict between President Donald Trump’s administration and Iran persists, analysts said.
Petroleum analyst Patrick DeHaan of GasBuddy noted that although oil prices paused briefly after a recent $20-per-barrel surge, the national average price for a gallon of gasoline could soon reach $4.20 to $4.30.
The University of Southern California’s Zage Business of Energy Initiative director Shon Hiatt said markets had assumed political pressure would force Trump to end the war quickly, but the conflict has continued without a clear endpoint.
“Everyone had been making this bet that Trump would chicken out when things got bad, pull out and the war would end,” Hiatt told The Washington Post. “But that hasn’t happened. It is not clear when this will end.”
According to the American Automobile Association, the national average price for a gallon of gasoline is now about $4.11, up nearly $1 from a year ago, while diesel averages $5.24 per gallon, a 40 percent increase.
The war has repeatedly disrupted tanker traffic through the Strait of Hormuz, a key chokepoint for roughly one-fifth of global oil supplies, and Houthi rebels in Yemen have threatened Saudi oil shipments in the Red Sea, claiming recent attacks on two Saudi tankers.
Former energy adviser Bob McNally said gas prices have become disconnected from market fundamentals and warned that July could bring a correction.
“The latest outbreak of violence could really send oil prices a lot higher,” McNally told The Washington Post.
Ben Cahill, director of energy markets and policy at the University of Texas at Austin, added that the buffers that mitigated earlier oil-price shocks have been eroded.
“It will be harder to avoid a price correction and a steep price reaction when new disruptions are happening each day,” Cahill said. “They are already having a bigger impact on market psychology now.”
West Texas Intermediate crude futures were trading above $89 per barrel on Friday, down from an opening price of $92.56 but higher than $69.23 a month earlier.