U.S. crude oil prices surged past $90 per barrel on Friday, marking the highest level in over two years. West Texas Intermediate (WTI) crude, the key oil price indicator in North America, closed the day slightly above $91, a significant increase from about $67 just a week earlier. This spike followed the recent military actions by the U.S. and Israel against Iran and its allies, leading to concerns about potential disruptions to oil supply routes.
The escalating conflict in Iran, coupled with the looming threats of drone or missile attacks by Iran, has led to a virtual halt in tanker traffic through the vital Strait of Hormuz. This strategic waterway serves as the primary exit point for oil shipments from the Persian Gulf, catering to 20% of the global oil demand. Tankers navigating through the strait, bordered by Iran in the north, transport oil and gas from countries such as Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates, and Iran.
U.S. Energy Secretary Chris Wright, in an interview with Fox News, anticipated that the surge in oil prices would likely persist for “weeks, not months.” He emphasized Iran’s historical role in driving energy prices up and expressed optimism about curbing Iran’s disruptive activities, which have posed threats to Americans and regional stability.
In the aftermath of the military actions, gas prices in the U.S. saw a notable increase of 34 cents per gallon within a week, reaching $3.32 per gallon, equivalent to around 120 cents per liter. Similarly, gas prices in Canada surged to 135.3 cents per liter following the recent airstrikes, as reported by Gasbuddy.com. This marks a rise from the average price of 128.8 cents per liter recorded a month prior. Gas Wizard, a platform monitoring gas prices nationally, projects a further escalation to nearly 153 cents per liter by Saturday.
The current scenario reflects the intricate interplay between geopolitical tensions and global energy markets, underscoring the potential impact of regional conflicts on fuel prices and consumer expenses.