The U.S.-Israeli war with Iran set off a surge in gasoline prices as fighting clogged a critical waterway for global oil delivery. Shoppers held out hope, however, for a reopening of the Strait of Hormuz and a relatively speedy recovery.
Tit-for-tat attacks on oil and gas sites across the Middle East in recent days have all but foreclosed that glide path, since repairs could stretch on for months and diminish fuel supply in the meantime, industry analysts told ABC News.
The prospect of a prolonged oil shock ratchets up the risk faced by the U.S. economy, they added, threatening a blow for households already bedeviled by elevated inflation and a near-frozen labor market.
“Both sides have taken the gloves off when it comes to attacks on infrastructure — and that’s just bad news for everyone,” Severin Borenstein, a professor of business administration and public policy at the University of California, Berkeley, told ABC News.
Iran launched a series of retaliatory strikes against vital energy infrastructure in nearby Gulf states after Israel hit its largest gas field a day earlier.
Among the retaliatory strikes, Iran hit the world’s largest liquefied natural gas (LNG) terminal at Ras Laffan in Qatar — the most serious attack on the country’s energy facilities since the start of the war.
In an effort to lower oil prices, the Trump administration has announced a release from the strategic oil reserve, eased sanctions on Russian oil and suspended a key regulation of domestic oil transport, among other measures.
The recent attacks on energy sites pushed global crude prices as high as $119 a barrel on Thursday, before oil shed some of those gains, hovering around $109 a barrel by Friday afternoon. Even after their dip, oil prices marked a staggering rise of more than 50% over the past month.
U.S. gasoline prices stand at $3.91, jumping 98 cents since a month earlier, AAA data shows.
A rapid rise in diesel prices, meanwhile, threatens to raise costs for groceries, apparel and just about every other product, since diesel makes up the lifeblood of the U.S. supply chain.
