Gasoline in the U.S. rose in price in a month of war the most since 1990

Gasoline prices in the U.S. topped $4 a gallon for the first time in more than three years amid an oil supply shock due to the war in the Middle East, CNBC writes, citing the American Automobile Association (AAA).

The average price of gasoline at gas stations across the U.S. reached $4.018, the highest since August 2022, when Russia's war against Ukraine shook energy markets, CNBC reported, citing AAA. Since late February, when the U.S. and Israel launched their first strikes against Iran, gasoline prices have risen more than 30 percent from $2.98, the association said. This is one of the sharpest jumps in the past 20 years, Bloomberg notes.

The average price of gasoline in the U.S. in March is expected to be 25 percent higher than in February, said David Doyle, chief economist at Macquarie Group. That would be the largest monthly increase since October 1990, he said.

In addition, CNBC writes, diesel prices in the U.S. topped $5 per gallon on March 17 and are now more than 40 percent above pre-conflict levels. This has broad implications for the U.S. economy, as diesel is used in freight transportation - both road and rail, the channel explains.

"Consumers have already faced the shock of higher diesel prices and higher airfare costs due to rising jet fuel prices. However, the full effect of higher diesel prices has not yet been seen and will gradually affect the economy over the coming months," Lipow Oil Associates President Andy Lipow noted on March 20.

Rising retail gasoline prices create political risks for the administration of U.S. President Donald Trump in a midterm election year. In addition, rising fuel prices complicate the Federal Reserve's task: Fed Chairman Jerome Powell and the regulator are trying to curb inflation and support employment at the same time, Bloomberg notes. "Gasoline over $4 a gallon is political death," Jorge Montepeque, an oil market analyst at Onyx Capital Group, told the Financial Times on March 26.

Prices for the global benchmark Brent on March 31 jumped to $115.6 per barrel amid Iran's strike on a loaded oil tanker in the port of Dubai. However, then - amid reports by The Wall Street Journal about US President Donald Trump's willingness to end military action against Iran - slowed down - at the time of publication, May Brent contracts are trading at $114. The cost of Brent may show in March a record monthly increase since the launch of the futures contract in 1988, notes CNBC. Since the end of February, oil quotations have added almost 60%.

U.S. WTI crude futures for delivery in May jumped to $106.86 per barrel at an intraday high on March 31, at the time of publication they are at $103.7. U.S. crude is also heading for its biggest monthly rise since 2020, the channel notes.

This article was AI-translated and verified by a human editor