U.S. retail gasoline prices have surpassed $3 per gallon for the first time since November, driven by escalating tensions in the Middle East. This development presents a significant challenge to public opinion on President Trump’s decision to launch an attack on Iran, as noted by industry analysts.
The unrest in Tehran, a reaction to U.S. and Israeli military actions, has disrupted oil supplies globally. This disruption stems from attacks on production facilities in neighboring regions and vessels traversing the vital Strait of Hormuz. Consequently, oil prices have soared, with Brent crude climbing over 5% to nearly $77 per barrel. This spike in crude costs has directly contributed to rising fuel prices.
The increase at gas stations poses a substantial threat to President Trump and his Republican allies as they approach the midterm elections in November. Many Americans are already grappling with the escalating costs of everyday essentials.
According to a Reuters/Ipsos survey, almost half of respondents indicated they would be less inclined to support Trump’s actions against Iran if such measures lead to higher oil and gas prices domestically.
“Gasoline prices hold significant psychological weight,” explained Mark Malek, the chief investment officer at Siebert Financial. “They are an inflation indicator that consumers encounter daily.”
Experts predict that each $10 increase per barrel in crude oil prices could translate to a 25-cent hike per gallon at the pumps. Malek added that issues at refineries might cause even steeper rises in fuel costs.
Average retail gasoline prices crossed $3 a gallon on Monday, according to an OPIS live database. They should rise to as high as $3.25 per gallon this week due to the current crisis, said Tom Kloza, senior adviser to fuel supplier Gulf Oil.
US gasoline prices had risen for four straight weeks before the attacks on Iran, GasBuddy data showed, as refiners began the transition to summer-grade motor fuel, which is mandated by environmental regulations and costlier to make.
The increases will be exacerbated by the conflict, GasBuddy analyst Patrick De Haan said.
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“In the week ahead, gasoline prices are likely to face heightened upward pressure as seasonal trends continue and markets navigate this evolving geopolitical landscape,” De Haan said.
