US-Iran Conflict Fuels Rising Fuel Prices

Experts warn that gasoline and diesel prices will continue to rise due to the ongoing conflict between Iran and the US. Despite President Trump's 'economic war' against Iran, which aims to pressure Tehran into concessions by cutting them off from their supporters, such as China, far-reaching sanctions have not yielded the expected results. The Strait of Hormuz has seen reduced shipping traffic, with only a quarter of global seaborne oil passing through before the war.

The Brent crude benchmark has risen steadily since early August, trading at around $94 per barrel, up from about $20 less than before the conflict. Thomas Puls, an economist at the German Economic Institute, attributes this to China and other major consumers drawing down their own oil reserves on a large scale, curbing global demand.

Puls notes that while Iran and the US were still at war, the price rose at a slower pace than expected, but has since accelerated. He also points out that refining capacity is in short supply globally, making diesel and gasoline market prices more relevant indicators of the situation.