New York — price Oil rose higher It showed no signs of stopping its rapid rise a week after the United States and Israel launched major attacks on Iran that escalated to… War in the Middle East.
The conflict in it Almost every country in the Middle East It has been damaged by missiles or drone attacks, leaving ships carrying nearly 20 million barrels of oil per day stranded in the Persian Gulf, unable to safely pass through the Persian Gulf. Strait of Hormuzthe narrow mouth of the Gulf, which is bordered by Iran on its northern side.
Disruption and damage to major oil and gas facilities in the Middle East has led to disruption of oil and gas supplies.
Oil prices topped $90 a barrel on Friday, with U.S. crude settling at $90.90, up 36% from last week, and Brent crude, the international standard, rising 27% over the week to $92.69.
The fallout worsens what consumers and businesses will pay for gasoline, diesel and jet fuel, with some drivers already… Feel it in the pump.
“It’s crazy,” said Mark Doran, who was pumping gas in Middlebury, Vermont, on Friday. “There’s no need for it, especially at a time when people are already suffering, but it’s not unexpected with all this unrest that’s going on.” “I don’t think there’s an end in sight to any conflict that we’ve started in the Middle East, so the fact that they’re saying there’s going to be a quick end is unbelievable, and the Middle East is, you know, a place that the United States won’t be able to solve.”
President Donald Trump said Monday that the United States expects its military operations against Iran to last four to five weeks but “ The ability to go much longerAnd on Friday, Trump appeared as well Excluding talks with Iran In the absence of “unconditional surrender.”
“The more news we get, the more it looks like this is going to continue for a really long time,” said Al Salazar, head of macro oil and gas research at Enverus.
In the United States, the price of a gallon of regular gasoline rose to $3.32 on Friday, an 11% increase from last week, according to the AAA Auto Club. Diesel sold for $4.33 a gallon on Friday, up 15% from last week.
Price shocks were felt most severely in Europe and Asia, markets that rely most on energy supplies from the Middle East. Diesel prices have doubled in Europe, and jet fuel prices have risen nearly 200% in Asia, according to Claudio Galimberti, chief economist at Rystad Energy.
Energy prices rose over the week as Iran launched a series of retaliatory attacks, including a drone strike on… US Embassy in the Kingdom of Saudi ArabiaAnd the conflict widens. Iran also struck a major refinery in Saudi Arabia and an LNG facility in Qatar, halting the flow of refined products and shutting down about 20% of the world’s LNG supply.
“We keep seeing news of ships, refineries or pipelines being targeted, so the list is very long,” Galimberti said. He added that as a result, approximately 9 million barrels of oil per day are off the market due to facilities being bombed or producers taking precautionary measures. “Right now, with all of this shut down, we are at a severe deficit.”
The United States is a net exporter of oil, but that does not mean that it is immune to increases in oil or gasoline prices, or that its producers are able to make up the difference.
Oil is traded on global markets, so even oil produced in the United States has increased in price based on what is happening in the Middle East. For many U.S. oil producers, “if you drill more wells in the ground, there will be a delay of about six months before you get that increase in production,” Salazar said.
Moreover, the United States cannot simply convert all of its crude oil into gasoline. This is because most of the oil produced in the United States is light, sweet crude, and refineries on the East and West coasts are designed primarily to process heavy, sour crude. As a result, the United States exports some of its crude oil and imports some refined products such as gasoline.
Jerry Dalpiaz, of Covington, Louisiana, said he started filling up his cars and gas containers “the day they announced the United States was starting military operations against Iran” because he assumed gas prices would rise.
“I can weather the storm because I’m in a good financial position, but I feel sorry for my fellow citizens who are living paycheck to paycheck because they have to drive to get to work and they have to change their oil and all that stuff,” Dalpiaz said. “They need some relief and it doesn’t look like that’s coming anytime soon.”
Trump released a plan on Friday to insure losses of up to about $20 billion in the Gulf region, aiming to restore confidence in maritime trade, help stabilize international trade and support American and allied companies operating in the Middle East.
But some energy experts said additional insurance wouldn’t solve the problem.
“The problem is that in the world of oil trading and oil shipping, people are concerned about counterterrorism,” said Amy Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, adding that they are concerned about unmanned robotic speedboats, carrying weapons, drones, mines or other devices. “For the United States to create a climate that eliminates the current bottleneck in the Strait of Hormuz, there must be a credible offer of solutions to the counterterrorism problem.”
Salazar wondered what the “new normal” would look like if the Strait of Hormuz was effectively reopened, and what effective security would look like.
“All it takes is one guy with an RPG (rocket-propelled grenade) to stand on the beach and take out a tanker, right?” Salazar said. “And that’s forever, you know what I mean?”
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Associated Press journalists Amanda Swinehart in Middlebury, Vermont, Stephen Smith in Covington, Louisiana, and Stan Choi in New York contributed to this report.