By Nicole Jao
NEW YORK, July 20 (Reuters) – U.S. gasoline pump prices crossed the $4 a gallon mark on Monday as renewed hostilities between the U.S. and Iran further disrupt energy flows through the Strait of Hormuz, a critical route for global oil supplies.
National average retail gasoline prices have climbed more than 30% since the U.S. and Israel attacked Iran at the end of February. The average pump price on Monday was $4.0030 a gallon, according to data from the American Automobile Association, or AAA.
The $4 per gallon mark, a price point of financial pain for many households, was last reached in late March, after Iran halted traffic through the Strait of Hormuz. Prices retreated below that threshold in June after the U.S. and Iran signed a memorandum of understanding to end the war.
Before the Iran war about 20% of global oil supplies flowed through the strait.
High pump prices have become a political flashpoint for U.S. President Donald Trump and his Republican Party, which will soon be campaigning to hold on to thin majorities in the U.S. Congress in November midterm elections.
Prices of gasoline rose alongside crude oil prices, which surged about 16% this week following the collapse of the truce between Washington and Tehran in early July. Retail fuel prices and crude oil typically move in the same direction because crude feedstock is the dominant cost for producing the fuel.
Energy prices have also been supported by the loss of Russian refining capacity due to Ukraine intensifying attacks on energy infrastructure.
Low U.S. fuel inventories also boosted prices. U.S. stockpiles stood at 210.5 million barrels last week, government data showed, about 1.5 million barrels below the five-year average.
(Reporting by Nicole Jao in New York and Chandni Shah in Bengaluru; Editing by Aidan Lewis and Sharon Singleton)
Comments