US Gasoline Prices Hit $4.44 Amid Oil Supply Crisis
US gasoline prices reached $4.44 per gallon as Brent crude breached $100 per barrel following supply disruptions in the Strait of Hormuz.
The national average price of gasoline in the United States reached $4.44 per gallon on September 17. This figure represents a 38.7% increase compared to the same period last year. Diesel prices also rose to a record high of $6.40 per gallon. These increases directly impact consumer spending and business costs.
International benchmark Brent crude exceeded $100 per barrel for the first time since May 22. The price spike followed attacks on vessels in the Strait of Hormuz. Saudi Arabia’s East-West Pipeline was taken offline after recent strikes. This outage threatens up to 4% of global oil supply.
Supply Disruptions Drive Price Increases
Tensions in the Strait of Hormuz escalated after the US targeted Iranian oil tankers. The Islamic Revolutionary Guard Corps reported attacks on US vessels and commercial tankers. Brent crude rose more than 3% on September 9. It climbed further to $107.63 per barrel after the pipeline shutdown was confirmed.
Market sources indicate that some oil shipments to Europe were canceled in mid-September. The physical supply squeeze adds significant upward pressure on global prices. The delay in deliveries affects refineries that rely on alternative routes. The persistence of the outage remains a key risk factor for markets.
Inflation and Monetary Policy Response
The US Consumer Price Index rose 0.4% month-on-month in August. Gasoline prices contributed more than one-third of this monthly increase. The year-on-year inflation rate stood at 3.4%. Higher fuel costs are a primary driver of current price pressures.
The Federal Reserve raised its policy rate by 25 basis points to 3.75%-4%. This is the first rate hike since 2023. Higher borrowing costs aim to constrain economic activity and curb inflation. A stronger dollar resulting from the hike may limit further oil price gains by weighing on global demand.
Political Pressure on Energy Strategy
Rising fuel costs create pressure ahead of the November 3 midterm elections. The White House is considering using the Defense Production Act to boost refining capacity. President Donald Trump stated that the conflict with Iran will end after the elections. He claimed that oil continues to flow freely through the Strait of Hormuz.
According to GN auto markets/energy: gasoline prices, the administration aims to lower consumer energy costs. Trump asserted that gasoline prices would fall once the war ended. He emphasized that the US Navy maintains full control of the waterway. These statements are closely monitored by investors and market participants.
