Oil prices surged Sunday evening to the highest levels since President Donald Trump returned to office as energy markets digested the U.S. military strike on Iran’s nuclear facilities — and the risk that Tehran may try to disrupt the flow of crude oil out of the Middle East.
U.S. crude oil futures rallied more than 6 percent to peak at $78 a barrel, more than $1 higher than the price on Jan. 20 when Trump was inaugurated. That jump is likely to filter through to gasoline prices just as drivers prepare to hit the road for the long July 4 weekend next week.
Trump had campaigned on promises to lower consumer energy prices as part of his “energy dominance” agenda, but the current average pump price of nearly $3.22 a gallon for regular gasoline is about 10 cents above the price when he was inaugurated — and likely to climb this week.
How much higher oil prices might go now depends on how Tehran responds to the attacks. Iran’s parliament’s voted to close the Strait Of Hormuz, the narrow waterway at the mouth of the Persian Gulf where a quarter of the world’s seaborne oil passes, but only an appointee of Iran’s supreme leader Ali Khamenei can make that determination. Even if that were to happen, the impact on the oil market would depend on whether Iran and its allies are satisfied harassing the oil tankers traversing Hormuz or resort to a full-scale campaign to block traffic altogether.
