Hawaii is the only state in the US where gas prices have already climbed above the $5 mark, and are priced at $5.6 per gallon. The other states are now not too far behind and could face a similar fate. Iran has not opened the Strait of Hormuz despite the ongoing ceasefire and has also threatened the US with consequences.
Gas prices are getting expensive in the US as a gallon has reached a high of $4.48 on Wednesday. Prices are now inching towards the $5 mark, as the Strait of Hormuz still remains closed. While the Trump administration announced the ‘Freedom Project’ to escort shipments, Iran has continued to threaten the waterway.
US gas prices are $1.32 higher than a year ago, according to the recent data from AAA. Higher prices lead to a disruption in transportation, affecting the supply chain in the US. Transportation firms could begin to hike delivery prices in order to save costs. The prices of commodities could go higher, leading to inflation.
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Strait of Hormuz Closure Adds Pressure on Gas Prices in the US
Ships are facing severe insecurity in the region, and this is making gas prices surge in the market. Crude prices remain consistently above $100, while Brent is trading at $107. They spiked more than 50% in just two months, causing a complete overhaul in the pricing of commodities.
Patrick De Haan, head of petroleum analysis for GasBuddy said that gas prices could go much higher from here. “Every day that we continue to see the Strait of Hormuz remain closed, we’re getting close to potentially seeing new records here across the board for gasoline,” he said. The analyst added that the conflict could escalate and cause more damage. “This just doesn’t really show any signs of stopping anytime soon,” he summed it up.