Gas prices rise as oil hits $111 a barrel
Gasoline prices in the U.S. jumped on Wednesday, as the Iran war continues to take a toll on energy infrastructure in the Middle East and slow shipping in the Strait of Hormuz.
Drivers now pay an average of $3.84 per gallon, up from $2.92 a month ago and the highest level since September 2023, according to data from AAA.
Diesel prices are also surging as the war constricts global oil supplies. On Tuesday, prices topped $5 a gallon for the first time since 2022. Diesel now top $6 ia gallon in California, Hawaii and Washington, according to AAA.
Brent hits $111 a barrel
Gas prices are rising due to the surge in crude oil, which in the U.S. accounts for 51% of the cost of a gallon of gas. A barrel of Brent crude, the international benchmark, has surged from roughly $70 per barrel just before the U.S. and Israel attacked Iran on Feb. 28 to as high as $111.45 on Wednesday afternoon, according to FactSet. The price for a barrel of benchmark U.S. crude rose to $99.24.
Crude has soared and swung rapidly in recent weeks, due to supply chain disruptions and cuts from major producers across the Middle East. Iran on Wednesday threatened to attack oil and gas infrastructure in Qatar, Saudi Arabia and the United Arab Emirates after claiming that some of its gas fields and related infrastructure were targeted.
Patrick De Haan, a petroleum expert at GasBuddy, suggested markets could shrug off concerns about escalating violence in the Persian Gulf as they wait to see if Iran follows through on its threats.
"Will Iran follow up and what does that look like, and how the U.S. might respond — that would be baked into the price of oil," he said.
The White House has recently taken actions to ease energy prices. On Wednesday, President Trump issued a 60-day waiver of the Jones Act, a law that requires goods shipped between American ports to be carried on ships that are U.S.-built, -flagged and -crewed.
But De Haan called the measure a "band-aid" solution that was unlikely to sharply reduce gas prices, saying that oil markets are more focused on the risks in the Strait of Hormuz.