WTI Crude climbed to $106 a barrel in Asian trade, sending California gasoline prices above $6 a gallon, the first U.S. state to breach that threshold since the Iran war.
Context
The spike follows fears of a prolonged U.S. blockade outside the Strait of Hormuz and reports of potential escalation of the war, tightening global oil supply and lifting benchmark prices.
Key Data
California's average gasoline price surged to $6.01 a gallon on Thursday, up from $4.64 at the start of the conflict. The national average rose to $4.30, a rise from $3.99 a month ago and $3.183 a year ago. Prices have surged by about 28% since the war in Iran began and the Strait of Hormuz was closed. The record high for California was $6.438 in June 2022, while the national record was $5.016 on June 14, 2022.
Quotes
Patrick De Haan, Head of Petroleum Analysis at the fuel-savings app, said the average U.S. gasoline price is now at its highest level since July 2022. "Prices have surged by about 28% since the war in Iran began and the Strait of Hormuz was closed," he added.
Outlook
If the Strait of Hormuz remains constrained, crude prices could stay elevated, supporting higher gasoline prices and potentially encouraging investment in alternative fuels and infrastructure.
By Charles Kennedy for Oilprice.com
