Hormuz Reopening May Not Bring Immediate Relief from Soaring Fuel Prices
The US Energy Information Administration (EIA) has cast doubt on President Donald Trump's claim that fuel prices will drop immediately after the Strait of Hormuz reopens. The EIA predicts that even if the conflict ends soon, full restoration of oil flows through the strait may take months.
The agency notes that it is difficult to estimate when and how the strait will reopen, as there has never been a precedent for its closure and subsequent reopening. As a result, uncertainty around future supply disruptions is expected to keep oil prices above pre-conflict levels for the rest of this year.
The EIA forecasts that US retail gasoline prices will peak at an average of $4.30 per gallon in April and remain above $3.70 per gallon for the year. Diesel prices are also expected to surge, peaking at $5.80 per gallon in April and averaging $4.80 per gallon for the year.