Houthi Escalation Drives US Gas Prices to Highest Levels Since May

A recent escalation in the Middle East has led to higher oil prices for American consumers. The Iran-backed Houthi rebels have seized key parts of the Red Sea coast, forcing Saudi Arabia to shut down a critical East-West oil pipeline.

This disruption has sent oil prices to their highest levels since May, with the average price of a gallon of gas in the U.S. climbing 17 cents in the past week to $4.32 on Monday.

The impact is being felt not just at the pump but also on store shelves, with Costco raising the price of its Kirkland brand motor oil to $58 for a five-quart, two-pack, up from $30 last year and limiting customers to one box per week.

Analysts are watching closely for China's next move as Beijing could reenter the market more aggressively, potentially pushing prices higher still. Unlike the U.S., China has a large cushion of oil reserves exceeding 1 billion barrels.