Oil prices have surged past $90 a barrel a week after the US and Israel launched major attacks on Iran, escalating into a Middle East war. The conflict has stranded oil shipments in the Persian Gulf and damaged key facilities, disrupting supplies. Consumers globally face higher gasoline and diesel costs as a result.
NEW YORK — Oil prices showed no signs of slowing their rapid climb a week after the US and Israel launched major attacks on Iran, escalating the conflict into a full-scale Middle East war. Nearly every country in the region has suffered damage from missiles or drone strikes, stranding ships carrying roughly 20 million barrels of oil daily in the Persian Gulf, unable to pass through the Strait of Hormuz bordered by Iran to the north.
Disruptions and damage to key oil and gas facilities have interrupted supplies. On Friday, American crude settled at $90.90 a barrel, up 36% from a week earlier, while Brent, the international benchmark, rose 27% to $92.69.
Consumers and businesses face higher costs for gasoline, diesel, and jet fuel. In the US, regular gasoline reached $3.32 per gallon, up 11%, and diesel $4.33, up 15%, per AAA data. The shocks hit Europe and Asia harder, with diesel prices doubling in Europe and jet fuel nearly tripling in Asia, according to Rystad Energy chief economist Claudio Galimberti.
Iran's retaliatory attacks widened the conflict, including a drone strike on the US Embassy in Saudi Arabia, hits on a major Saudi refinery, and a Qatar LNG facility, taking 20% of global LNG supply offline. This has removed about 9 million barrels of oil per day from the market, Galimberti said, creating "an extreme deficit."
President Donald Trump said Monday that US military operations against Iran would last four to five weeks but could extend much longer. On Friday, he ruled out talks without Iran's "unconditional surrender."
"It’s crazy... the fact that they say that there’s going to be an end that quickly is not believable," said Mark Doran, pumping gas in Vermont.
Enverus macro oil and gas research head Al Salazar remarked, "The more news we get, the more it seems like this is going to last a really long time."
The US, a net oil exporter, is not immune due to global trading; domestic production faces a six-month lag, and East/West Coast refineries are geared for heavier crude, leading to exports of light sweet crude and imports of some refined products.
Trump announced Friday a plan to insure up to $20 billion in Gulf region losses to restore maritime confidence. But New York University's Amy Jaffe stressed the need for credible counter-terrorism measures against threats like drones and mines to reopen the Strait.
