US gas prices hit $4.23 high as Hormuz fears drive oil surge

Average US gas prices have hit a new high at $4.23 per gallon, their highest since 2022 and a record since the start of the war with Iran, according to the motor club AAA.

The price of Brent crude, the benchmark that influences the price of US gasoline prices, now stands at $114.60 a barrel, up nearly 25% from the recent low since mid-April. US gas prices a year ago averaged $3.16.

The milestone comes as US officials contemplate an extended blockade by the US and Iran of the strait of Hormuz, the transit chokepoint for 20% of the world’s oil.

“A significantly bigger risk arises if higher gasoline and oil prices leak into other necessities such as grocery and utility prices – though so far there is little evidence for this,” said Bank of America analysts in an NBC News report.

Donald Trump told aides to prepare for a long blockade to throttle Iran’s economy by blocking Iranian oil shipments – a less risky option than escalating the conflict with a resumption of bombing or walking away from the conflict without a nuclear deal, according to a report in the Wall Street Journal on Wednesday.

The number of ships transiting the strait is now at its lowest level since the start of the war. There were 35 transits during the week of 20 April to 26 April, down from 78 the week before, according to data from Lloyd’s List Intelligence. Prior to the war, around 130 ships passed through the strait daily.

On Tuesday, Trump claimed on Truth Social that Iran had informed the administration that it was in a “State of Collapse”.

“They want us to ‘Open the Hormuz Strait,’ as soon as possible, as they try to figure out their leadership situation,” he said.

Trump later posted on Truth Social on Wednesday morning, alongside a doctored image of himself holding a gun that read “no more Mr. Nice Guy”!” that “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!”