Diesel, gasoline prices rise again across US as Iran tensions escalate

On March 14, US gasoline prices averaged $3.68 per gallon, a 23% increase since February 28, before the start of the Iran conflict, according to the American Automobile Association.

Brent crude futures jumped 2.67% to close at $103.14 per barrel, while WTI crude rose 3.11% to $98.71 per barrel on March 13, CNN reports.

Historically, oil prices lead gasoline prices by several days, signalling further fuel cost increases in the near term.

The spike in fuel prices follows Iran’s effective closure of tanker traffic through the Strait of Hormuz, the waterway responsible for transporting 20% of the world’s oil.

US Energy Information Administration data shows that diesel prices averaged $4.85 per gallon this week, up from $3.71 the week prior to the first strikes on Iran. Rising diesel costs could increase shipping expenses for companies such as FedEx, which charges surcharges when diesel exceeds $3.55 per gallon.

The conflict in Iran may significantly impact the US economy. Food prices could rise due to higher shipping costs, and fertiliser availability may be affected as transit through the Strait of Hormuz is disrupted. Airline ticket prices have also surged following increased jet fuel costs.

By Jeyhun Aghazada