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US petrol prices have risen back above $4 a gallon as the resurgent Middle East conflict reverberates across the world’s biggest economy, squeezing American motorists and fuelling voter frustration with Donald Trump.
Prices at the pump broke the key threshold on Monday, according to data from the AAA motoring group, after ratcheting steadily higher in recent weeks as tit-for-tat strikes between the US and Iran escalated.
The rise in costs for motorists underlines the war’s continued impact on Americans after official statistics last week showed price pressures had eased in June during a period of détente in the conflict.
The higher prices represent a growing liability for the president ahead of midterm elections in November as voter fatigue with the conflict grows, with many blaming him for the escalation.
Since its outbreak in late February the war has ripped through global energy markets, pushing crude prices well above $100 a barrel in April and May as Iran largely choked off shipments through the Strait of Hormuz, a crucial waterway for oil shipments.
Petrol prices surged as high as $4.56 per gallon in May before falling to $3.79 earlier this month after Washington and Tehran signed a memorandum of understanding extending a fragile ceasefire deal agreed in April.
That helped temper US inflation in June to an annual rate of 3.5 per cent, down from a three-year high of 4.2 per cent in May.
But the respite has proved shortlived. Trump this month declared the truce “over” following a renewal of hostilities in the strait. Both sides have exchanged strikes in recent weeks in a battle for control of the waterway.
Crude oil prices hit $90 a barrel in Monday trading, up 20 per cent this month. West Texas Intermediate, the US marker, traded as high as $85 a barrel, before receding slightly.
Traders have warned that global oil stockpiles, which helped to avert a wider economic crisis earlier in the war, have dwindled, leaving western economies with minimal buffers to absorb higher prices.
“Every oil shortage can become a fuel crisis,” said Kevin Book, managing director at consultancy ClearView Energy.
“This one started out that way, with ships trapped in the Gulf exacerbating refineries shuttered in Russia and run cuts in China. If conflict continues, that fuel crisis will likely worsen.”
Voters have gradually lost patience with the conflict. An FT poll this month found 58 per cent of voters said the war had not been worth the cost. The same survey showed that Trump’s approval rating had slipped to just 36 per cent.
The average American driver fills up their tank about 50 times a year. ClearView research shows a meaningful inverse correlation between presidential approval and prices at the pump.
“If you want to know how an American feels about elected officials, stop at a gas station,” said Book.
