Gasoline and diesel futures surged on the first day of trading after the US and Israel launched attacks on Iran, threatening to blot out one of the biggest bright spots of President Donald Trump\u2019s energy agenda.<\/p>\n
Gasoline futures jumped as much as 9% Monday as the flow of tankers carrying crude and fuel through the Strait of Hormuz all but ceased. Average retail prices in the US hit $3 a gallon on Sunday, the highest in three months, according to the American Automobile Association.<\/p>\n
Trump frequently touts falling gasoline prices when talking about American energy dominance, claiming last week they were below $2.30 a gallon in most states, even as the national average was $2.98. While it\u2019s unclear how long it will last, the run-up in prices threatens to pose a significant impediment for the president and his party as midterm elections loom later this year.<\/p>\n
\u201cAmericans have very staunch beliefs on how much they should pay for gasoline,\u201d Patrick De Haan, GasBuddy\u2019s head of petroleum analysis, said in an interview. \u201cSo it does become a political liability.\u201d<\/p>\n
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Global oil futures surged the most in four years Monday, rising as much as 14%. The price of crude accounts for about half of how much motorists pay at the pump. And when oil rises quickly, gasoline prices tend to follow suit.<\/p>\n
\u201cIt\u2019s the rockets and feathers effect,\u201d Christopher Knittel, a professor of energy economics at the Massachusetts Institute of Technology. \u201cWhen things are going up, they go up fast.\u201d<\/p>\n
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One East Coast chain raised prices by 15 cents a gallon over the weekend, a person familiar with the matter said, speaking on the condition of anonymity.<\/p>\n
Diesel prices are jumping too, with futures up as much as 17%, and retail prices topping $3.75, to the highest in more than three months.<\/p>\n
Republicans have already been on the defensive over rising electricity bills in recent months. Yet gasoline prices, one of the most visible signs of inflation, are especially potent politically. Voters typically blame the White House when they rise.<\/p>\n
White House Press Secretary Karoline Leavitt said the Trump Administration\u2019s policies have led to record oil production in the US and rising output in Venezuela. \u201cThe departments of Energy and Treasury will continue to monitor oil markets and do everything possible to keep prices stable,\u201d Leavitt said in an email.<\/p>\n
The increases in gas prices come on top of an annual transition from winter-grade gasoline to summer-grade gasoline, as refiners gradually produce gasoline that pollutes less in warm weather but costs more to make. That transition has already brought prices off their seasonal winter lows, but could add up to another 40 cents a gallon as it continues, De Haan said.<\/p>\n
Iran pumps about 3.3 million barrels of oil a day, making it OPEC\u2019s fourth-largest producer. But the nation wields far greater influence over the world\u2019s energy supplies because of its strategic location on the Strait of Hormuz, the shipping lane for about a fifth of the world\u2019s crude from suppliers including Saudi Arabia and Iraq.<\/p>\n
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While the strait is technically open as of Sunday, ships have largely stopped traversing it, and many insurers plan to withdraw coverage of war risks for vessels entering the Persian Gulf. The longer it continues, the more it becomes a potential problem for Trump.<\/p>\n
\u201cNo president really has good options for a prolonged disruption to Hormuz flows,\u201d Bob McNally, president of consulting firm Rapidan Energy Group. \u201cThe only thing to do is shorten the disruption.\u201d<\/p>\n
While Trump often takes credit for falling gas prices \u2014 which as of last week were on average down about 4% nationally since he took office \u2014 the reality is presidents have limited control over energy markets.<\/p>\n
One of the few levers the president can pull to bring prices down is selling barrels from the US Strategic Petroleum Reserve. The reserve, however, is only about half full, containing about 415 million barrels, following a series of drawdowns during the Biden administration.<\/p>\n
Even if the surge in gasoline prices is short, it still poses a risk for the president heading into the midterms, said Kevin Book, a managing director for ClearView Energy Partners.<\/p>\n
\u201cIf you go to the pump and you see a massive increase in prices, you might not forget it in November even if prices retreat,\u201d Book said. \u201cThe memory can last longer than the price spike \u2013 that\u2019s the political risk.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n