Gasoline prices climb toward $5 as Strait of Hormuz remains closed

Gasoline prices grew to $4.48 per gallon on Tuesday as oil prices stayed above $100 per barrel.

The national US average has risen sharply in recent days, climbing about $0.31 over the past week and standing $1.32 higher than a year ago, according to AAA data.

“This just doesn’t really show any signs of stopping anytime soon,” Patrick De Haan, head of petroleum analysis for GasBuddy, told Yahoo Finance on Tuesday.

Retail gasoline prices have risen roughly 50% since the start of the Iran war as oil prices surged. “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,” De Haan added.

On Tuesday, Brent crude futures (BZ=F) inched down toward toward $110 per barrel. West Texas Intermediate (CL=F) hovered near $101 as the US said a ceasefire with Iran remained in place and Washington pressed forward with initiatives to escort neutral vessels that are stuck near the Strait of Hormuz.

“If the Strait remains closed another month, we will be at $5.00 per gallon,” wrote Andy Lipow, president of Lipow Oil Associates.

California, which has high fees and taxes and lacks enough refineries, is already seeing a state average of $6.11 per gallon.

At the same time, diesel prices surged to new records in parts of the country. Some areas, such as Illinois and Michigan, are touching the $6 per gallon mark as refinery issues in the region put upward pressure on prices.

JPMorgan analysts noted last week that while Southeast Asia faces the most direct supply threat from the Middle East conflict, the US has, ironically, been the second-most-impacted region.

A combination of constrained refining capacity growth, a regionally fragmented refined fuels market, and US exports of gasoline and other energy products has contributed to elevated prices at the pump in the US.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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