By Shariq Khan NEW YORK, March 11 (Reuters) - The national average retail price of gasoline crossed $3.50 a gallon this week to hit its highest since May 2024, data from price tracking services AAA
US gasoline prices surpass $3.50 a gallon at the pumps as Iran war rages on
Rising Gasoline Prices Amid Middle Eastern Conflict
By Shariq Khan
Gasoline Price Surge and Its Causes
NEW YORK, March 11 (Reuters) - The national average retail price of gasoline crossed $3.50 a gallon this week to hit its highest since May 2024, data from price tracking services AAA and GasBuddy showed, as the Israel-U.S. war with Iran stokes supply concerns.
Impact of Middle Eastern Oil Disruptions
Disruptions to Middle Eastern oil exports through the Strait of Hormuz have caused a surge in fuel prices across the globe that is threatening to pinch consumers' wallets and derail global economic activity. That could pose the biggest risk for U.S. President Donald Trump and his Republican Party in the midterm elections in November, especially as a major driver of Trump's re-election in 2024 was his vow to lower energy costs.
Consumer Perspective
"Geopolitical shockwaves don't take months to hit your wallet. They take days," said William Stern, chief executive officer at U.S.-based small business lender Cardiff. "You feel the exact squeeze the second you fill up your car just to take the kids to practice."
Recent Price Movements and Comparisons
U.S. average retail gasoline prices have jumped nearly 60 cents since Trump's decision to join Israel in attacking Iran on February 28 and stood at $3.58 a gallon on Wednesday.
The 20% increase in the space of just 11 days is on par with the jump in pump prices seen at this time four years ago after Russia invaded Ukraine, marking an unusually rapid rise.
Future Price Outlook
Even more increases are likely to follow in the days ahead as more ships were hit in the Strait of Hormuz on Wednesday and as the United States undergoes a transition to summer-grade gasoline sales, which burns cleaner but is costlier to produce.
Wholesale and Crude Oil Price Trends
Spot and wholesale gasoline prices were registering double-digit increases on Wednesday, said Denton Cinquegrana, chief oil analyst at Oil Price Information Service.
Wholesale price changes are typically reflected at the pumps the next day.
Crude Oil Price Factors
Crude oil prices, the biggest component in fuel costs, were also on the rise on Wednesday despite a proposal by the Paris-based International Energy Agency to release a record 400 million barrels of oil from strategic stockpiles. [O/R]
Uncertainty Around IEA Oil Release
The IEA's announcement on the release raised more questions than answers as the group did not announce who would release how much oil and when, Cinquegrana said.
(Reporting by Shariq Khan in New York, Editing by Nick Zieminski and Chizu Nomiyama)
