Oil prices are rising to nearly a six-week high amid a wave of strikes between the United States and Iran in the Strait of Hormuz, through which roughly a fifth of the world’s oil supply travels during peacetime. On Monday, Brent oil futures, the global benchmark, rose to hover around $97 a barrel — up 9 percent over the last five days and 19 percent over the last month. Monday’s market moves are approaching the highest point since July 24th, when prices topped $97.93.
US West Texas Intermediate crude similarly rose to $92.27 a barrel, up 79 cents, also a near six-week high. In recent days, strikes escalated in the Strait of Hormuz. The US hit three Iranian oil tankers on Saturday, while Iran’s Islamic Revolutionary Guard Corps (IRGC) said it had struck three tankers and three US-linked vessels in other areas.
The supply deficits globally are persisting, and there is little end to these shortages,” Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security (CNAS), told Al Jazeera. On Monday, Saudi Aramco’s Jizan facilities were struck for the second time in the last month, according to reporting from the Financial Times that cited two people familiar with the matter. Amid increased strikes, there’s less traffic in the Strait of Hormuz, with an average of 10 commodity ships crossing the vital chokepoint each day over the last 10 days, according to Kpler, a data analytics platform.
Then it increased again, and then it reduced again, and now it’s increasing again on this weekend’s exchange plus the Aramco attack,” Arif Gasilov, a partner at the Gasilov Group, an energy advisory firm, told Al Jazeera. The average price for a gallon (3.78 litres) of petrol has jumped 7 cents over the course of a week, reaching $4.15 nationally on Monday, up from $4.08 this time a week ago, according to the American Automobile Association (AAA), which tracks daily petrol prices. That’s up from $4.04 this time a month ago and $2.98 from February 28th, when the US and Israel first struck Iran, marking a 39 percent increase since the war began.
Last week, diesel prices hit all-time highs at $5.85 per gallon. Prices have continued to climb since, with average prices on Monday topping $5.90 per gallon. It continues to be in product markets where the biggest disruptions lie, though, including diesel,” Ziemba added.
Those price gains are weighing on Americans, who have spent an average of $764.59 per household on fuel since the war began. That’s $418.82 more than usual, according to Brown University’s Watson School of International and Public Affairs. Ahead of the US’s September 5-7 Labor Day weekend, the unofficial end of summer and a popular time for US travel, AAA forecasts showed a 20 percent increase in flight costs compared to the same weekend last year.
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