The instability of fuel oil in the world market due to the impact of the Iran war has now put a strain on the pockets of the common people of the United States. U.S. retail gas prices rose 9 cents to $3.41 a gallon, the highest since August 2024. This figure emerges in the latest data from the American Automobile Association (AAA).
According to the report of the American media CNN, the average price of gas has increased by 43 cents in just one week. This was the biggest one-week gain for oil since sanctions against Russia were imposed in March 2022 over its invasion of Ukraine.
There are three main reasons behind this unusual increase in the price of fuel oil. First, the ongoing war in Iran; Second, the strategic closure of the Strait of Hormuz. Note that 20 percent of the world’s total fuel oil is transported through this channel.
Third, Iran’s counter-attacks on neighboring countries’ oil installations. Along with the United Arab Emirates, Qatar and Kuwait, Iran has also reportedly hit the oil fields of Saudi Arabia, the world’s largest oil exporter.
Oil prices have risen by an average of 5 cents or more per day over the past five days. Oil prices rose 11.2 cents in a single day on Tuesday, the highest single-day gain since Hurricane Katrina in 2005.
Diesel prices are increasing at a faster rate than gas. According to today’s data, diesel prices rose 18 cents to $4.51 a gallon in one day. In the last one week, diesel prices have increased by a total of 75 cents.
The price is expected to rise further in the coming days. West Texas Intermediate, the US oil benchmark, rose 12.2 percent to $90.90 a barrel on Friday. This is the biggest post-Covid one-day increase in oil prices in 2020. The price rose 36 percent for the week, the biggest one-week gain for the crude oil contract since 1983.
