Oil prices are nearing a six-week high due to escalating strikes between the United States and Iran in the Strait of Hormuz, a critical route for global oil supply. On September 7, Brent oil futures increased to approximately $97 per barrel, marking a 9 percent rise over the past five days and a 19 percent increase over the last month. US West Texas Intermediate crude also rose to $92.27 per barrel, reflecting similar trends.
Recent military actions have intensified in the region, with the US targeting three Iranian oil tankers on September 4, while Iran's Islamic Revolutionary Guard Corps reported strikes on three tankers and three US-linked vessels. Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, noted that ongoing conflicts are contributing to global supply deficits.
Additionally, Saudi Aramco's Jizan facilities were reportedly struck for the second time in a month, which could delay production recovery. Traffic through the Strait of Hormuz has decreased, with an average of 10 commodity ships crossing daily over the past ten days, according to data from Kpler.
Arif Gasilov, a partner at the Gasilov Group, commented on the fluctuating prices, suggesting that the market may not respond significantly to a potential ceasefire. US consumers are experiencing rising petrol prices, with the average cost for a gallon reaching $4.15, up from $4.08 the previous week, and significantly higher than $2.98 in late February.
Diesel prices have also surged to record highs, impacting the broader economy. Patrick De Haan from GasBuddy highlighted that high diesel prices will affect consumer goods. Since the onset of the conflict, households have spent an average of $764.59 on fuel, which is $418.82 more than usual.
As the US approaches the Labor Day weekend, flight costs are projected to increase by 20 percent compared to last year. Economic concerns are becoming a focal point for voters ahead of the midterm elections, with polls indicating declining approval ratings for President Donald Trump's economic management.
In contrast, China is adapting to the situation by utilizing domestic resources and tapping into its strategic petroleum reserve. John Gong, an economics professor, stated that China has effectively managed its oil consumption and is transitioning towards alternative energy sources, with over 50 percent of cars sold in the country being electric.