Diesel Fuel Prices in the US Exceed $6 for the First Time
Following conflicts in the Middle East and the rise in the oil market, the price of a gallon of diesel in the US has left a historic threshold behind.
The increase in global oil prices following clashes in the Bab el-Mandeb Strait, which connects the Red Sea and the Gulf of Aden, has reflected on the US domestic market, causing diesel fuel prices to break records and exceed $6 per gallon.
Clashes in the Strait and Ships
The strategic Bab el-Mandeb Strait, connecting the Red Sea and the Gulf of Aden, has become the focus of the global security agenda due to increasing clashes between government forces and the Houthis on Yemen's western coast. In the shadow of escalating military tension in the region, commercial vessel transits through the Bab el-Mandeb Strait have dropped to critical levels.
Decline in Vessel Traffic
According to data compiled from maritime tracking systems, only 79 commercial vessels passed through the Bab el-Mandeb Strait in the last three days. Before the crisis, an average of 70 to 75 vessels per day navigated through the strait.
Rise in the Oil Market
While disruptions to shipping lanes in the Red Sea fueled concerns in global energy markets, the bill for the tension centered in the Middle East reflected on the US domestic market. Global oil prices rose by about 9 percent on a weekly basis yesterday, driven by escalating tensions in the Middle East.
Brent and WTI Prices
While November futures for Brent crude traded at $108 per barrel, the price of West Texas Intermediate crude oil is near the $100 mark.
Historic Price Increase
The price of a gallon of diesel in the US, which was $3.75 on February 28 when US and Israeli attacks on Iran began, reached $6.05 yesterday. Due to the appreciation of oil, diesel prices in the US have exceeded $6 per gallon for the first time.
Statements by President Trump
US President Donald Trump touched upon the effects of the current situation on Wednesday, arguing that they entered the war to prevent Iran from acquiring nuclear weapons. Trump stated that the moment they win the ongoing war with Iran, oil prices will drop and they will win this war.