Why gasoline prices fell but then started climbing again

Key Points:

• The average price of regular gasoline in the U.S. rose 31 cents last week to $4.48 per gallon, marking a 50% increase since the war with Iran began, driven primarily by a global energy crisis and disruptions in crude oil supply through the Strait of Hormuz.
• The Strait of Hormuz, a critical passage for about 20% of the world’s crude oil, has been effectively closed due to the conflict, causing significant supply shortages and pushing crude oil prices to as high as $112 a barrel in early April.
• Gasoline prices briefly declined in mid-April amid ceasefire hopes but surged again as the conflict persisted, with experts noting persistent upward pressure on prices due to ongoing supply constraints and geopolitical risks.
• The U.S. decision to block Iranian oil exports in April further tightened global oil supply, contributing to the recent rise in gasoline prices by removing a significant source of oil from the market.
• Even if the conflict ends and the Strait of Hormuz reopens, experts warn that it will take months or longer for gasoline prices to return to pre-war levels due to lingering risk premiums and industry caution around shipping through the region.