The average price has now climbed 43 cents in just the last week, the largest weekly increase since early March 2022, soon after oil-rich Russia was hit with widespread sanctions after its invasion of Ukraine, News.Az reports, citing CNN.
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This latest rise is a reaction to the war in Iran and the virtual closure of the Strait of Hormuz, a crucial channel through which 20% of the world’s oil passes, as well Iran’s retaliatory attacks on the oil facilities of its neighbors — the United Arab Emirates, Qatar, Kuwait and Saudi Arabia, the world’s largest oil exporter.
Most of the price increase has come in the last five days, with each day seeing a jump of 5 cents or more. The increase of 11.2 cents on Tuesday was the largest one-day hike since Hurricane Katrina in 2005.
Diesel prices are rising even faster. The average price of diesel rose 18 cents to $4.51 a gallon in Saturday’s reading, taking it up 75 cents in just the last week.
And more prices hikes could be on the way. The price of a barrel of West Texas Intermediate (WTI), the benchmark for US crude, closed up 12.2% to $90.90 a barrel on Friday, the largest one-day increase since May 2020 during Covid. That left that key oil price up 36% for the week, the largest weekly increase in the futures contract since at least 1983.
