U.S. President Donald Trump’s address to the nation on Wednesday, in which he vowed more aggressive strikes on Iran, has put consumers on course for record fuel prices at the pumps just ahead of the country’s peak summer travel season, market experts said.
Americans expected Trump’s speech to outline a plan to end the Iran war and reopen the Strait of Hormuz, as Iran’s blockade of the global oil conduit has sent oil and fuel prices skyrocketing, pinching consumers’ wallets. But instead, Trump vowed to bomb Iran back into the “Stone Ages” and said the strait would just open “naturally” when the war ends.
The comments sent U.S. crude oil prices surging more than 10% on Thursday, and U.S. average retail gasoline prices are now set to climb to between $4.25 and $4.45 a gallon by next week after crossing $4 a gallon for the first time since 2022 at the start of this week, said Patrick De Haan.
The pain could worsen. If there is no viable plan to reopen the Strait of Hormuz, the U.S. average price of gasoline will likely cross $5 a gallon and hit record levels within a month, De Haan said.
Wholesale markets had begun moving higher on Thursday, with midmorning increases of 17 cents a gallon in the Great Lakes, Great Plains, Northeast and West Coast markets, and a 19-cent-a gallon hike in the Gulf Coast, said Tom Kloza, chief energy adviser to Gulf Oil on social media.
Meanwhile, diesel prices, less visible to consumers but arguably more impactful as they are directly tied to the cost of making and moving goods, could hit a record high within two weeks, De Haan said.
The national average retail diesel price is set to climb from $5.47 a gallon on Thursday to between $5.80 and over $6 a gallon within the next two weeks, De Haan said. The record U.S. average retail price was $5.83 a gallon in 2022.
(Reporting by Shariq Khan in New York; Editing by Aurora Ellis)