American drivers are paying more at the pump than they have in four years, with the national average hitting $4.18 a gallon on Thursday as critical negotiations over Middle Eastern oil shipping routes hit a wall.
The price jump marks a stark reversal from a year ago, when drivers paid around $3.15 a gallon. The last time gas averaged above $4.15 was April 2022, in the weeks following Russia's invasion of Ukraine.
The squeeze on consumers varies sharply by geography. Texas motorists are paying $3.72 a gallon, while California drivers face an average of $5.96. Oil-producing states enjoy advantages as much as $2 per gallon lower than states dependent on imports.
The underlying issue is gridlock over reopening the strait of Hormuz, a crucial chokepoint through which roughly a fifth of the world's oil and natural gas typically flows. Negotiations have stalled over competing demands: Iran wants the US to lift its naval blockade of the strait, while the Trump administration refuses without movement on nuclear issues.
On the trading floor, Brent crude climbed to $111 a barrel by Tuesday morning, though that remains below the $119 peak hit last month. US benchmark WTI crude hovered near $100 a barrel. Both benchmarks are running roughly 60 percent higher than pre-war levels.
Trump signaled his frustration with Iranian leadership in conversations with advisers on Monday, calling their proposal insufficient. By Tuesday, he was using social media to claim Iranian officials told him their nation faces collapse and desperately wants to reopen the strait. He appeared skeptical but willing to wait for clarity on their internal power situation.
The diplomatic standoff is reshaping the global energy landscape. The United Arab Emirates announced Tuesday it would exit OPEC, the oil cartel that has struggled to move exports through the contested waters. The move represents a significant victory for Trump, who has repeatedly criticized OPEC as a cartel that exploits consumers worldwide.
Energy companies in the West are reaping substantial rewards from elevated prices. BP reported Tuesday that first-quarter profits exceeded $3.2 billion, more than double the prior year, as Middle Eastern competitors face continued disruption from regional conflict.
Author James Rodriguez: "The real story here is that Trump is willing to leverage a humanitarian crisis to extract concessions on the nuclear question, and it's working so far."
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