Gasoline prices in the United States are expected to rise sharply this week as oil prices rebound close to $100 per barrel. The national average price for gasoline has reached approximately $4.12, reflecting a rise of about $0.53 compared to the previous month, according to data from AAA.
The anticipated spike in prices follows President Donald Trump’s announcement of a blockade on maritime traffic through the Strait of Hormuz, intended to cut off Iran’s oil export route. This announcement came after negotiations between Washington and Tehran broke down over the weekend. Patrick De Haan, the head of petroleum analysis at GasBuddy, indicated that both gasoline and diesel prices are likely to continue climbing until shipping through the critical strait resumes.
On Monday, gasoline futures saw a 3% increase, signalling an impending rise in wholesale prices for retailers. Analysts at JPMorgan have projected that if maritime traffic through the Strait of Hormuz remains effectively halted, gasoline prices could escalate to $5 per gallon nationwide.
President Trump described the blockade of the Strait of Hormuz as effective immediately, stating that the US Navy would prevent any ships from entering or leaving the area. This escalates tensions in a region that is pivotal to global oil trade.
The US crude benchmark, West Texas Intermediate, traded near $100 per barrel, while Brent crude also approached this marker. Reports suggest that there are signs the supply system is experiencing mounting pressure, as European and Asian refiners aggressively compete for available cargoes. This competition has driven spot physical Brent prices to unprecedented levels, with the price surging to $126 per barrel on Friday, up from a record of $144 earlier in the month.
Historically, the difference between the physical Brent market and futures contracts has remained between $1 and $2 per barrel, but the current widening gap suggests challenges in sourcing barrels for immediate delivery, even as the market anticipates eventual supply normalisation.
In summary, the combination of geopolitical tensions, particularly related to Iran’s oil exports, and strategic blockades is forecasted to significantly increase gasoline prices in the near term, with industry analysts warning of an ongoing supply strain in the market.
