Geopolitics Fuels Gas Price Surge: US-Iran Tensions and Ukraine Attacks Drive Up Costs
Gas prices in the US are expected to continue rising due to ongoing geopolitical tensions. Analyst Patrick De Haan, from GasBuddy, believes that de-escalation is the only way to lower costs. He predicts a 5-15 cent price hike over the next week or two.
The Ukrainian attacks on Russian oil refineries have had a significant impact on global energy supplies. Russia has blocked diesel exports, putting pressure on oil supply and causing refining capacity to go offline. This situation is problematic for one of the world's largest energy producers, whether it's in Russia, China, or the US.
De Haan pointed out that the global economy is 'intertwined', which means that disruptions in one region can have far-reaching effects on others. He noted that the US national average price of gas has crossed $4, with diesel prices averaging over $5 per gallon. The Strategic Petroleum Reserve (SPR) will continue to fall until at least late August, potentially putting the US in a difficult position.
When asked about President Trump's directive for oil companies to lower prices, De Haan explained that they do not have the power to manipulate prices. Oil prices are determined by market forces, and oil companies are beholden to their shareholders.