Gasoline prices in the U.S. have surged significantly since the onset of the Iran war, climbing over $0.90 to reach an average of $3.88 per gallon. This spike is attributed to supply shocks, particularly threats from Iran’s Islamic Revolutionary Guard Corps to disrupt oil shipments through the Strait of Hormuz. The Trump administration is contemplating U.S. Navy escorts for tankers, but immediate action appears unlikely, raising concerns about sustained high prices.
Historically, similar geopolitical tensions have led to prolonged increases in oil and gas prices. For instance, during the 1973 OPEC embargo and the 1979 Iranian Revolution, prices surged dramatically and remained elevated for years. The current situation suggests that the initial price jump may be just the beginning, with the United States Oil Fund (USO) reflecting a nearly 50% increase since the conflict began.
Investors should brace for the possibility of higher gas prices persisting for an extended period, contingent on the resolution of the conflict. For a deeper dive into the implications of this situation, I recommend checking out the full article.
Source: fool.com