US pump prices cross $4 again on renewed Middle East fighting

NEW YORK — 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.

"Gasoline is definitely going to be a contributing factor to inflation if we continue to ‌see the Strait of ‌Hormuz disrupted. Refined fuels in general are already facing extreme tightness due to ⁠the loss of global refining capacity – especially in Asia ⁠and the Middle East," said Alex Hodes, director of energy market strategy at brokerage StoneX.

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 Congress in the November midterm elections.

Hodes added that Trump was likely to target policies aimed at taming gasoline prices, with pressure for action only likely to grow if prices rise again before November.

Prices of gasoline ​rose alongside crude oil prices, which surged last 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.

Contributing: Chandni Shah and Ashitha Shivaprasad

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