The national average price of gasoline in the United States climbed back above $4 per gallon on Monday, marking the highest level since mid-June. According to AAA data, the average price for a gallon of regular gasoline was $4.0030 as of July 20, up from $3.8720 the previous week. This increase follows renewed hostilities in the Middle East, including Iranian attacks on vessels in the Strait of Hormuz and U.S. strikes against Iranian targets in the region. The surge in crude oil prices, which jumped 16% last week, is the primary driver behind the rise in gasoline costs. Patrick De Haan, head of petroleum analysis at GasBuddy, had predicted the national average would reach $4 per gallon within 7-10 days.
Regional Disparities in Prices
Gas prices have risen sharply across the U.S., with the highest averages in West Coast and non-continental states, including California, Hawaii, Alaska, Washington, and Nevada. Central states like Oklahoma and Kansas have seen the lowest averages during the recent spike. The differences in prices are stark, but all states have experienced significant increases. Analysts cite several factors driving the rise, including blockades in the Strait of Hormuz, attacks on Russian oil refineries by Ukraine, and seasonal shifts to more expensive fuel blends.
Market Dynamics and Global Impact
The U.S. remains the world's largest oil producer, but global oil markets remain interconnected. De Haan noted that oil exports are at record levels, reflecting global market dynamics. The Strait of Hormuz, a key transit route for 20% of the world's oil, has seen disruptions, exacerbating supply concerns. Additionally, refinery outages in the American Midwest have tightened supply in the Great Lakes region, further pushing prices higher.
Historical Context
The national average price of gasoline was $2.98 per gallon on February 27, surged over $4 by March 31, and peaked at over $4.50 in mid-May before cooling to around $3.70. The recent escalation in the Middle East has reversed the downward trend, with prices now climbing back to over $4 per gallon.