Oil prices in the US have hit $110 a barrel as it soars to a level not seen in years
The war in West Asia is taking a toll on oil as prices skyrocketed to more than a whopping $110 per barrel on Monday, the highest it has been since the pandemic. It has not been long since the US and Israel launched their military exercise in Iran, and already, the price of oil is up by almost 50% than what it was before all of this went down. This has substantially affected prices in Asian countries and in the United States as well.
In a recent Truth Social post, President Donald Trump urged Americans to stay patient, claiming that this uptick in oil prices will only be temporary. “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY! President DJT,” the President wrote on the social media platform.
As per a report in the New York Times, traders are concerned about accessing oil through the crucial Strait of Hormuz, which lies to the south of Iran and has been blocked off almost entirely. One-fifth of the world’s oil and substantial amounts of natural gas move through the strait each day during regular operations. It is unclear as to when the passage of ships through the strait will return to normal, hopefully bringing prices down.
The price of gasoline on average in the US currently stands at $3.45, up by about 16% since the war started. Meanwhile, diesel prices have seen a much steeper rise of 22%. Natural gas might have also been an issue for the US, but since the country is the world’s top natural gas producer, things have been stable on that side. Even then, Trump has said that the U.S. Navy will escort tankers through the Strait of Hormuz.
Despite the rise in gas prices, Energy Secretary Chris Wright is of the belief that it would only be a matter of weeks before gas prices come down. “The Trump administration has been all in on lowering energy prices, and I would say quite successfully,” he said as per a New York Post report. “We have seen a dramatic decline in gasoline prices, in diesel prices. Soon, you will see it in electricity prices as well.”
Wright also claimed that gas prices would be down to less than $3 a gallon as the US had no plans on attacking Iran’s oil and energy infrastructure. “There are no plans to target Iran’s oil industry, their natural gas industry, or anything about their energy industry,” he said. It will be interesting to see how gas prices behave in the next few weeks.
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