Spiking oil prices following the U.S.-Israel strikes on Iran and the effective closure of the Strait of Hormuz have resulted in gasoline price surges in the last week, according to GasBuddy, at “one of the fastest rates in years,” said Patrick De Haan, head of petroleum analysis at the Dallas-based company.
“With additional attacks across the Middle East over the weekend pushing oil above $100 per barrel for the first time in years, fuel markets are now rapidly recalibrating to the risk of prolonged disruption to global supply flows,” De Haan said Monday. “As a result, gasoline prices in many states could climb another 20 to 50 cents per gallon this week, with price-cycling markets potentially seeing increases as early as today. Diesel may rise even more sharply, with increases of 35 to 75 cents per gallon possible as global distillate markets react. While the situation remains highly fluid, consumers are already beginning to feel the impact as energy markets adjust to this sudden escalation.”
National average of gas prices rises 51.1 cents
The nation’s average price of gasoline has risen 51.1 cents over the last week and stands at $3.45 per gallon, according to GasBuddy data compiled from more than 12 million individual price reports covering over 150,000 gas stations across the country. The national average is up 54.1 cents from a month ago and is 41.6 cents per gallon higher than a year ago.
The top 10% of stations in the country average $4.93 per gallon, while the bottom 10% average $2.88 per gallon.
The states with the lowest average prices include Kansas ($2.90), Oklahoma ($2.95) and Arkansas ($2.98).
The states with the highest average prices include California ($5.14), Washington ($4.58) and Hawaii ($4.33). All of the price averages are courtesy of GasBuddy.
“Immediate term retail prices are moving up,” Denton Cinquegrana, chief oil analyst with OPIS, a Dow Jones Company, told CSP on March 3. “The U.S. gasoline average is back above $3 per gallon. This is also the time of year where prices tend to rise with the formulation change from winter grade to summer grade gasoline. This just added some 'juice' to the move, making it move back toward, say, a level $3.11 per gallon a lot quicker than anticipated.”
- Cinquegrana on March 3 answered six questions on what U.S. c-store retailers should be watching regarding United States' and Israel's coordinated targeted attacks on Iran.
Diesel national average prices jump 85.9 cents
The national average price of diesel rose 85.9 cents in the last week and stands at $4.60 per gallon.
Diesel prices at the top 10% of stations in the country average $5.32 per gallon, while the bottom 10% average $3.76 per gallon.
Texas ($3.93), Kansas ($3.95) and South Dakota ($3.99) have the lowest average diesel prices.
California ($5.87), Washington ($5.46) and Hawaii ($5.18) have the highest average diesel prices. All of the price averages are courtesy of GasBuddy.
Crude oil prices rise amid Middle East tensions
While consumers see prices climbing at the pump, the underlying crude market also reflects the regional tensions.
Over the past week, crude prices climbed as the U.S.-Israel strikes on Iran raised concerns about a broader Middle East conflict and potential disruptions to shipments through the Strait of Hormuz, one of the world’s key energy corridors. The latest escalation added a risk premium on already-tight supplies, driving greater market volatility, according to GasBuddy.
In the coming weeks, the situation involving Iran is likely to remain a key factor for oil markets, especially if threats to regional production or shipping lanes emerge, which could keep crude prices elevated, GasBuddy said.
In early Monday trade, a barrel of West Texas Intermediate crude oil rose $5.39 per barrel to $72.41, up from $66.85 per barrel last Monday, according to GasBuddy. Brent crude oil was up $6.42 per barrel in early trade, to $79.29 per barrel, up from $72.08 per barrel last Monday.
Supply holds steady, pump sales dip
The Energy Information Administration’s (EIA) Weekly Petroleum Status Report for the week ending Feb. 27 showed U.S. oil inventories rose by 3.5 million barrels and are about 3% below the seasonal average for this time of year, while the Strategic Petroleum Reserve was unchanged at 415.4 million barrels.
The EIA also reported that U.S. gasoline inventories fell by 1.7 million barrels but remain about 3% above the five-year seasonal average. Distillate stocks, which include diesel, rose by 0.4 million barrels and are roughly 3% below the five-year seasonal average. Refinery utilization increased 0.6 percentage points to 89.2%, while implied gasoline demand, the EIA’s proxy for retail consumption, fell 442,000 barrels per day to 8.29 million barrels.
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