U.S. Petrol Prices Cross $4 Mark for First Time in Four Years

As tankers idle at the mouth of the Persian Gulf and oil markets tighten by the day, a distant war is steadily rewriting the arithmetic of everyday life in the United States, turning a routine stop at the pump into a costly reminder of how quickly global conflict can seep into household budgets, unsettle economic confidence and test the limits of political promises at home

The price of petrol in the United States has climbed past $4 a gallon for the first time in nearly four years, a threshold that carries both economic and political weight, as a widening conflict involving Iran disrupts global energy flows and unsettles households already under strain.

The national average for regular gasoline reached $4.02 a gallon, according to the AAA motoring organization, more than a dollar higher than when the war began. Diesel prices, critical to the movement of goods, have risen even more sharply, up about $1.70 over the same period.

At the center of the surge is the effective closure of the Strait of Hormuz, a strategic waterway through which a significant share of the world’s oil supply passes. For the past month, traffic through the corridor has slowed to a trickle or halted altogether, constricting the production and transportation of energy across the Middle East and sending crude oil prices sharply higher.

That rise is now filtering through to consumers. Before the conflict began on Feb. 28, gasoline in the United States averaged about $2.98 a gallon. Diesel stood at roughly $3.76. It now averages $5.45, a jump expected to push up the cost of food and other goods.

President Donald Trump, who made lowering fuel prices a centerpiece of his 2024 campaign, has sought to reassure Americans, describing the increase as a temporary disruption with limited long-term consequences. But economists and market analysts are growing more cautious, warning that sustained high prices at the pump could curb consumer spending and weigh on economic growth.

“If the conflict is contained soon, the hit to confidence may be temporary,” analysts at Moody’s Ratings Agency wrote in a recent note. “But a prolonged crisis could prompt more precautionary saving and further discretionary spending cuts.”

The latest increase brings prices to their highest level since August 2022, though still below the record highs reached in the aftermath of Russia’s invasion of Ukraine, when gasoline peaked at $5.01 a gallon and diesel at $5.81. Even so, the current rise may prove more painful for many Americans.

“Consumers are in a much weaker position now than they were in 2022,” said Christopher Hodge, chief economist for the United States at Natixis CIB, pointing to slower job and wage growth and the depletion of savings that households had accumulated during the pandemic.

Oil markets are signaling further strain. Brent crude, the global benchmark, is trading near $120 a barrel, on track for what could be the largest one-month increase on record. West Texas Intermediate, the U.S. benchmark, has climbed above $100 a barrel for the first time since 2022.

Some economists warn that if oil prices rise to $140 a barrel and remain there, the risk of a broader economic downturn would increase significantly.

“The duration of the war is the key variable: the longer it persists, the more likely something breaks,” said Matthew Martin, senior U.S. economist at Oxford Economics.

The effects are not confined to the United States. Fuel prices are rising worldwide as higher wholesale energy costs ripple through supply chains. In Britain, petrol prices have increased by 14 percent and diesel by 27 percent since the conflict began. Some countries, including Sri Lanka and Bangladesh, have introduced fuel rationing, while Slovenia recently became the first European Union country to follow suit.

Elsewhere, governments are experimenting with ways to cushion the blow. Australia has temporarily cut fuel taxes, and two of its states are offering free public transportation in an effort to reduce demand.

In the United States, seasonal factors are adding to the pressure. The AAA has pointed to increased travel during the spring break period as an additional driver of demand, amplifying the upward push on prices.

For American households, the result is a familiar but unwelcome squeeze — one that reaches beyond the gas station, into grocery bills, travel plans and broader financial confidence — and one whose trajectory now depends largely on how long the conflict, and the disruptions it has unleashed, endure.

By Mohd Hassan, edited by Faustine Ngila (Impact Newswire).

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