The American Automobile Association (AAA) on Thursday said that the national average price of gas jumped to a three-month high as the Iran war escalates tensions between Washington and Tehran.
Gas Prices Climb 13 Cents in a Week
The national average price of gas, in the past week, jumped 13 cents, according to AAA. “Volatility in the Strait of Hormuz has pushed crude oil back in the $100 per barrel range for the first time since July,” AAA said.
The report also cited data from the Energy Information Administration (EIA): demand for gasoline decreased last week from “8.92 million barrels per day to 8.55 million.” The report also said that gas production decreased from 9.8 million to 9.3 million barrels.
Uncertainty over the Strait of Hormuz has reportedly risked escalation from Iran, with a report by the New York Times suggesting that senior Iranian officials think escalation is the key leverage it holds over the U.S. The Islamic Revolutionary Guard Corps (IRGC) said that it had struck two U.S. vessels and eight oil tankers, which was denied by the U.S. Central Command.
Trump Says Democrats Will Destroy Texas Oil
Speaking at Day 2 of the Midterm Convention in Dallas, Texas, President Donald Trump slammed the Democratic Party amid high fuel costs. “If the radical left Democrats and communists win this election,” Trump said, they would “destroy Texas oil and gas, thereby doubling and tripling your taxes.”
Texas remains a crucial element of the domestic oil supply. According to the EIA, Texas produced over 42% of the total domestic crude oil production. Trump’s Energy Secretary Chris Wright had earlier touted “quadrupled” oil production in Texas’s Permian Basin.
Trump had earlier said that he was mulling renaming the Strait of Hormuz to the “Trump Strait” during the first day of the event. Trump had also said that the U.S. struck nine Iranian oil vessels recently.
Elizabeth Warren Slams Trump
Meanwhile, Sen. Elizabeth Warren (D-Mass.) criticized Trump over rising energy costs in the U.S. amid the war with Iran. Notably, diesel prices in some parts of California had “maxxed out” to $9.999/gallon, according to data shared by GasBuddy analyst Patrick De Haan.
The diesel crack spread had also reached its all-time high of $102/bbl in August. The diesel crack spread refers to the profit margins that refineries earn to refine crude oil into diesel.
On the other hand, the Iran-backed Houthis have taken control of the port city of Mocha and may have also reportedly struck Saudi Arabia’s crucial East-West pipeline as tensions escalate. The pipeline has a 7-million-barrel-per-day capacity and was built in the 1980s.
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