Following renewed hostilities and air strikes between the U.S. and Iran, as well as the blockade of the Strait of Hormuz, the price of oil is climbing and with it, higher gasoline prices.
The average price of diesel fuel in the U.S. jumped to more than $5 a gallon, according to the AAA, and the average price of gas is almost $4, returning to their highs before the June memorandum of understanding between the US and Iran.
A year ago today, the AAA says, the average price for a gallon of diesel was $3.72, almost a dollar and a quarter less than it is now.
Earlier this week, Iran declared the strait of Hormuz shut and U.S. announced it was imposing a blockade on all ship traffic to or from Iranian ports.
According to AAA, diesel price hikes lead to rising costs across the board as renewed diplomatic uncertainty and new US and Iranian airstrikes affect both the fuel pump and the international wholesale markets “The impact is universal,” said an AAA spokesman, Robert Sinclair Jr. “Everything gets to the retail consumer by dieselburning truck.”
Currently, the price of a barrel of oil stands at about $81 as wholesale prices are being driven by erratic news from the White House.
West Texas Intermediate (WTI) Crude, as of July 16 was at $79.42 per barrel, and Brent Crude was at $84.89 per barrel.
This past Monday, the president announced the US would take over the strait and charge 20% of the value of any cargo going through the waterway but dropped the plan the next day.