Gas prices likely to remain high for months, energy experts say
Summary
Gas prices in the U.S. are expected to stay high for many months, even if a peace deal is made between the U.S. and Iran and the Strait of Hormuz reopens quickly. This is because it will take a long time for oil shipments to resume normal flow and for supplies to increase.Key Facts
- The average price of regular gas in the U.S. was $4.29 per gallon recently, down from over $4.50 in May.
- Before the conflict between the U.S., Israel, and Iran started in February, gas averaged $2.98 per gallon.
- The Strait of Hormuz is a key waterway that carries about 20% of the world’s oil and liquefied natural gas.
- Even if oil prices fall immediately after a peace agreement, gas prices will drop slowly due to supply chain delays.
- Oil needs to be shipped through the strait, processed by refineries, and then supplied to gas stations, which takes time.
- About 57% of the cost of gasoline comes from oil prices; the rest includes refining, taxes, and distribution.
- Global oil supplies and inventories are low and will need months or years to fully recover.
- U.S. households have spent about $401 more on gas and diesel since the Iran war began.
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