Gas prices in the United States have climbed more than $1.40 a gallon since President Donald Trump began the war on Iran in February, and a temporary ceasefire has not stopped the pain at stations across the country. The national average stood at $4.45 a gallon, according to AAA.
Reports of drone and missile attacks on Monday kept the world guessing, investors skittish and oil prices high. For drivers asking when will gas prices go down? the answer now depends less on what happens at the pump than on whether the global oil market calms down enough to bring down the cost of crude.
The problem is immediate because the price consumers pay is tied to that global market, and demand for oil still greatly outstrips supply. The United States does not produce enough oil to make up for the millions of barrels unable to move out of the Persian Gulf, even as Iran's closure of the Strait of Hormuz has not interrupted shipments to the U.S. from Mexico and Canada, which together account for more than 60% of U.S. petroleum imports.
That is the part of the story that has kept American drivers somewhat insulated from the worst of the shock. Oil shipments from Mexico and Canada are still arriving, and the United States has increased oil and natural gas production over the past decade, largely because of shale oil fracking. It is also a net exporter, with annual liquefied natural gas exports worth more than soybean or corn exports.
But the broader comparison is not flattering. The European Union countries that have ramped up renewable energy output over the years have been better able to avoid steep spikes in electricity prices, and Bill McKibben said the contrast fits the crisis neatly: “Sunlight has to travel 93 million miles to reach the Earth, but none of those miles go through the Strait of Hormuz.”
The tension is that Washington has not escaped the market it is trying to ride out. Since last January, the Trump administration has been, but the facts on the ground point to a simple conclusion: as long as oil remains tight and the fighting keeps traders nervous, gas prices are likely to stay elevated rather than fall quickly.
