Saudi Pipeline Closure Threatens US Fuel Prices for Months

Fuel prices in the US are expected to continue rising due to a Saudi pipeline closure. The pipeline, which can move 7 million barrels of crude oil per day, was damaged by a drone strike and may not be operational for one to two months, according to petroleum consultant Andrew Lipow.

With the Strait of Hormuz and Bab el-Mandeb Strait too dangerous for most oil tankers, Saudi Arabia has limited options. Lipow estimates that if Saudi Arabia can bypass pipeline pump stations, operations might be restored at 50% capacity within a few days. However, repairs to the pump stations could take up to two months.

As a result, fuel prices are likely to remain high in the US. The national average gas price hit $4.46 on Friday, while diesel broke another record high of $6.44, according to AAA. California is experiencing the highest diesel prices in the nation, averaging $8.39.

The impact of high fuel costs is being felt across the country, with American households having paid an extra $460 on gas and $378 on diesel since the start of the Iran war, according to Brown University research.