Gas prices have skyrocketed in the past week, rising more than 15 cents in that period, with the national average sitting at just over $4.31 per gallon, according to AAA. In another blow to American consumers, diesel prices are at the highest recorded average, standing at about $6.23 per gallon as of now. They are going up higher.
Though prices have been rising steadily in recent weeks, the past week has seen a significant jump. Just one week ago, the average price of gas was at $4.15 per gallon and diesel was at $5.90. Compared with the average prices one month ago, the last week reveals an unusually high leap as the conflict in the Middle East wears past the six-month mark. Despite diesel prices breaking records, gas still remains below the highest recorded national average of about $5.01 in June, 2022. However, averages by state show a different reality, with California maintaining its status as having the highest gas prices in the nation, at $6.00 per gallon.
U.S. Central Command (CENTCOM) announced that American forces destroyed five Iranian oil carriers — a strike aimed at retaliating against repeated Iranian ballistic missile attacks on U.S. Navy warships and crippling the illegal oil exports funding the IRGC. In response, media reports indicate that the Islamic Revolutionary Guard Corps (IRGC) retaliated by launching strikes on several vessels transiting the Strait of Hormuz region. The volatile situation in the strait, one of the world’s most consequential waterways for the transport of oil and liquefied natural gas, has significantly driven up the cost of oil since the conflict began in February.
Sitting in the $60 range before the advent of operations, crude oil surged to more than $110 per barrel in April, according to Trading Economics. A low was seen at the beginning of July, with prices back down under $70 per barrel. However, the reprieve was temporary, with costs shooting up again. Although they have fluctuated significantly since then, prices went back over $100 per barrel in the last week. As of Monday, costs sit at about $101 per barrel.
The closure of ’s EastSArabiaaudi -West pipeline following drone strikes — which the Kingdom and intelligence reports traced back to Iranian-backed militias in Iraq — further exacerbated the situation. The more than 700-mile-long pipeline served as an overland bypass, allowing Saudi Arabia to transport crude oil to its Red Sea terminals without using the Strait of Hormuz.
In the narrow Bab el-Mandeb Strait, a chokepoint for the Red Sea, the Iran-backed terrorist group, the Houthis, made gains in recent days. As hostilities continue to intimidate commercial shipping, global energy supply chains are at risk of further disruption.