The national average price of gasoline in the United States has just topped $4.50 per gallon, the highest level since the middle of July 2022, according to data from GasBuddy, as the Iran war drains fuel inventories and sends crude prices higher.
Prices are now just $0.50 off the all-time high hit in June 2022, when the Russian invasion of Ukraine led to crude oil prices spiking to above $100 per barrel.
Nationwide, the all-time high was set on June 14, 2022, when a gallon of regular gasoline at retail sites topped $5 and was $5.016.
The pain at the pump for American consumers may only be starting, with the busiest driving season yet to begin and the Strait of Hormuz remaining closed for nearly nine weeks.
Even if the U.S. and Iran somehow reach an agreement and traffic through Hormuz is restored to some semblance of normality, it would still take the market weeks, and even months, to overcome the worst oil and fuel supply disruption in history.
In many U.S. states, the average gasoline prices are higher than the national average, with California topping the chart with gasoline at over $6.10 per gallon.
Since March 1, the start of the war in Iran, Americans have spent $23.9 billion more on gasoline, according to estimates by Patrick de Haan, Head of Petroleum Analysis at GasBuddy.
The driving season, further weeks of closed Strait of Hormuz, and further drops in U.S. fuel inventories are setting the stage for even higher gasoline prices in the summer, analysts say.
“The US gasoline market is genuinely tight and tightening further into summer,” Morgan Stanley analysts wrote in a note earlier this week, as carried by Bloomberg.
U.S. gasoline stocks are on track to drop to historic lows of below 200 million barrels by the end of August, according to Morgan Stanley.
As of the end of April, gasoline stocks were at 222.3 million barrels, 2% below the five-year average and the lowest since 2014 for this time of year.
By Michael Kern for Oilprice.com
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