Gas Prices Set to Rise Again as Crude Oil Tops $104 Per Barrel

TLDR

• National average gas price sits at $4.12/gallon, up ~$0.53 from a month ago
• Trump announced a U.S. Navy blockade of the Strait of Hormuz after weekend talks with Tehran collapsed
• WTI crude jumped over 8% to above $104/barrel; Brent rose 7.5% to ~$102
• JPMorgan warns gas could hit $5/gallon if the Strait remains blocked
• Dated Brent hit a record $144/barrel earlier this month; spot prices at $126 on Friday

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Oil prices blew past $100 a barrel on Monday after President Trump ordered the U.S. Navy to blockade the Strait of Hormuz, cutting off one of the world’s most important oil shipping lanes.

WTI crude surged more than 8% to above $104 per barrel. Brent crude climbed 7.5% to around $102.

Brent Crude Oil Last Day Financ (BZ=F)

The announcement hit fuel markets fast. The national average price of gasoline now stands at $4.12 per gallon, up roughly 53 cents from a month ago.

JPMorgan analysts have warned that if the Strait stays effectively closed, pump prices could reach $5 per gallon nationwide.

Physical Oil Market Under Pressure

The stress is showing up most clearly in the physical oil market. European and Asian refiners are scrambling for available cargoes, pushing spot Brent prices to record levels.

On Friday, dated Brent — the price for oil available for immediate delivery — was priced at $126 per barrel according to Platts data. Earlier this month, it hit a record $144 per barrel.

That’s a massive gap compared to normal. The spread between physical Brent and futures contracts is usually just $1 to $2 per barrel.

That kind of spread is a sign the market is running tight on actual supply right now, not just in theory.

What It Means at the Pump

For U.S. drivers, the math is straightforward. Higher crude means higher wholesale gasoline costs. Higher wholesale costs flow to retailers, and then to the pump.

GasBuddy’s De Haan flagged gasoline futures pointing to a coming surge in prices paid by gas stations to restock their supply.

The blockade also renewed concerns about inflation and the drag it could put on global growth, with both WTI and Brent now firmly above the $100 threshold that tends to get economists nervous.

Dated Brent was priced at $126 per barrel as of Friday, with the record $144 print still fresh from earlier this month.

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