The disagreement between the US and Iran has resulted in an unprecedented surge in gasoline costs, posing a major recession threat to the American economy and generating worldwide consequences.
The world records a record jump in fuel prices / © Pixabay
The military action against Iran, started by US President Donald Trump, has seriously impacted American finances. In late March, gasoline costs in the United States surpassed a crucial threshold for the first time since 2022, jeopardizing not only the domestic US economy but also international supply networks.
Time reports on this.
Record jump in fuel prices
According to specialists, the average retail cost of gasoline in the United States has exceeded $1.06 per liter. This signifies a substantial increase of over 26 cents per liter compared to costs before the war commenced on February 28. The situation on the West Coast, especially in California, is even more critical: there the price of fuel has already reached $1.55 per liter due to local taxes and infrastructure difficulties.
The cost of diesel, which is vital for transportation, building, and farming, has also risen 45% since the beginning of the conflict, reaching $1.44 per liter. Economists caution that the diesel price increase will undoubtedly lead to elevated consumer costs across all categories of items.
“The Trump administration attempted to build a campaign on affordability ahead of this year’s midterm elections, but the war has only worsened the already challenging economic state in the US,” the publication indicates.
Disappointing forecasts and oil at $200
Specialists anticipate that fuel costs will continue to escalate, as there is generally a delay between unrefined oil prices and the numbers at filling stations. If the conflict continues, diesel risks achieving new historic highs, reaching $1.58 per liter.
The most negative predictions suggest that if the war extends into the summer and essential Iranian oil centers are damaged, the price of Brent crude could surge to $120 or even $200 per barrel. In such a case, the cost of gasoline for the consumer could climb to $1.85 per liter, which would be a catastrophe for worldwide markets.
Despite the US administration's efforts to soften the impact by releasing 172 million barrels from the Strategic Petroleum Reserve, specialists remain doubtful. The obstruction of the Strait of Hormuz, through which a fifth of the world's oil passes, is invalidating most attempts to stabilize the market.
As a reminder, the war in Iran has caused oil costs to skyrocket. Simultaneously, China has overtaken India as the primary buyer of seaborne deliveries of Russian oil.