U.S. crude oil prices surged above $90 per barrel on Friday, marking a milestone not seen in over two years. West Texas Intermediate (WTI) crude, the predominant oil pricing standard in North America, closed the day slightly above $91, a notable increase from approximately $67 just a week earlier. This price escalation coincides with the recent initiation of military actions by the U.S. and Israel against Iran and its affiliated groups.
The escalating conflict in Iran, coupled with the looming threat of Iranian drone or missile assaults, has effectively halted nearly all maritime traffic through the Strait of Hormuz. This crucial waterway serves as the primary exit route for oil shipments from the Persian Gulf, catering to 20% of the global oil market. Tankers traversing the strait, which lies adjacent to Iran’s northern border, transport oil and gas from various countries including Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.
In response to the unfolding events, U.S. Energy Secretary Chris Wright expressed to Fox News his anticipation of a sustained surge in prices, projecting a duration of “weeks, not months.” He emphasized Iran’s historical role in driving energy prices upwards and highlighted the current disruption as an opportunity to curtail Iran’s destabilizing activities and bolster regional security.
The impact of these developments is palpable in fuel prices across North America. Gasoline prices in the U.S. have surged by an average of 34 cents per gallon in the past week, reaching $3.32, equivalent to 120 cents per liter. Similarly, Canadian gas prices surged to 135.3 cents per liter following the recent airstrikes, as reported by Gasbuddy.com. This surge contrasts with the average price of 128.8 cents per liter recorded just a month prior.
Gas wizard, a platform monitoring gas prices nationwide, anticipates a further increase in prices, with projections indicating a potential rise to nearly 153 cents per liter by Saturday. The ongoing geopolitical tensions in the Middle East continue to exert pressure on global energy markets, influencing prices and supply dynamics.