(The Center Square) – American gasoline prices continued to rise on Friday and are up the most of any week since 2022.
Iran widened attacks on energy-producing countries near its borders and the Strait of Hormuz remains closed to shipping, dashing hopes for a quick resolution to a crisis sending shockwaves through global markets. The United States last Saturday began a military campaign in Iran, one that has continued throughout the week with aggression.
Friday at 1 p.m. Eastern, the U.S. national average price for regular gasoline had jumped approximately 35.9 cents per gallon from the same time in the previous week, reaching approximately $3.34 per gallon, according to GasBuddy. The 12% rise from the previous Friday was the largest weekly increase since March 2022, when Russia’s invasion of Ukraine roiled global energy markets.
Gasoline prices in Indiana rose 44.3 cents during the week while drivers in Florida, Louisiana and Oklahoma had seven-day increases of 43.9 cents, 42.3 cents, and 40.9 cents per gallon, respectively.
Meanwhile, benchmark prices for other key fuels in overseas markets rose even more during the week. In Europe, the price of liquified natural gas – LNG – at the TTF Hub was up about 52% in the week, reaching $15.61 per million British thermal units. In Asia, the Japan-Korea Marker was up 91% in the week $31.65 per million BTU, which compared with $3.20 per million BTU at the Henry Hub in Louisiana, up a modest 6.8% on the week.
Second-term Republican President Donald Trump said in an interview with Reuters late Thursday that the U.S. military operation was his top priority, not higher gasoline prices.
“They’ll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit,” the president said.
The president reiterated on Friday that a deal with Iran will require “unconditional surrender.” On Thursday the president said he would be “all for” a ground offensive inside Iran by the region’s Kurdish forces.
GasBuddy head of Petroleum Analysis Patrick De Haan said in an interview Thursday afternoon that prices were surging across a range of fuels that include U.S. gasoline, diesel, and jet fuel as markets realized U.S. naval escorts of oil and gas tankers would not occur immediately.
“Nothing’s moving, and I think that’s why the market suddenly ramped up today,” said De Haan. “In addition, we saw Iran escalate today by launching new missile attacks on Azerbaijan.”
U.S. wholesale jet fuel prices were up by 72% at one point of the day on Thursday, noted De Haan.
“The U.S. Navy will escort ships as soon as reasonable,” Energy Secretary Chris Wright said Friday in an interview on Fox News.
On Tuesday, the president ordered the U.S. Development Finance Corporation to offer political risk insurance and naval convoys for ships transporting energy and other commodities through the Strait of Hormuz and the Persian Gulf.
About 20% of the world’s crude oil passes through the Strait of Hormuz.
Treasury Secretary Scott Bessent said Wednesday on CNBC that U.S. officials will make a “series of announcements” aimed at facilitating shipments of oil, LNG, and other commodities out of the Persian Gulf.
Early Friday afternoon, New York Mercantile Exchange West Intermediate Texas crude oil futures for delivery in April traded at $90.49 per barrel, up $25.28 or 38.8% in the week since the conflict began. This was the largest increase in percentage terms over a seven-day period since oil demand collapsed during the COVID-19 era in 2020.
“There is a lot of volatility in the markets,” said Mike Moncla, president of the Louisianan Oil and gas association. “In general, higher prices are better for the oil and gas industry in Louisiana and elsewhere, but we also need stability and clarity – a year from now this whole thing might be over and a barrel of oil might be back at $60.”
Still, gasoline prices remain relatively inexpensive. In 2022, the year Russia’s invasion of Ukraine pushed global energy prices sharply higher, a gallon of regular grade gasoline averaged $3.88 per gallon and in June peaked at a monthly average of $4.92 per gallon.
“There’s no cheaper liquid in the world than gasoline,” said Moncla. “If you had to fill your tank with milk or Windex or any other liquid out there, I think you’d spent a whole lot more than you do filling your tank with gasoline.”
