Prices at American gas stations have increased sharply by almost 35% since the beginning of the operation against Iran, while the overall level of food prices in the United States has hardly changed, it became known based on data from fuel and food statistics.
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The US and Israeli operation against Iran began on February 28 and increased the risks to the global oil market.
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According to the American Automobile Association (AAA), from February 26, two days before the start of the operation, to July 21, the average price of a gallon of regular gasoline increased from $2.983 to $4.019. Thus, in less than five months, fuel prices have risen by 34.7%.
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The rise in prices at gas stations occurred against the background of a sharp rise in oil prices. After the outbreak of hostilities, ship traffic through the Strait of Hormuz almost stopped, creating a threat of disruptions on one of the world’s most important energy routes. According to the International Energy Agency, before the conflict, about a fifth of the world’s energy supplies passed through the strait.
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Against the background of reduced shipping, a barrel of American WTI crude oil rose in price from $ 65.1 at the end of February to $ 114.58 on April 7 – by 76%, according to data from the US Energy Information Administration (EIA). Then the quotes retreated from their peak values: by mid-July, a barrel cost 79.2 dollars, remaining almost 22% more expensive than before the start of the operation.
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Prices at gas stations followed a similar, albeit smoother trajectory. In May, the average cost of gasoline reached $4.56 per gallon, dropped below $3.84 by early July, and then exceeded four dollars again. Price changes were influenced not only by oil quotes, but also by seasonal demand and internal factors of the American fuel market.
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For motorists, the difference turned out to be noticeable: refueling a 15-gallon tank began to cost about $ 15.6 more. The variation between the states was even more noticeable – from $3.344 per gallon in Indiana to $5.519 in California. Hawaii and Washington were also among the most expensive states, while Mississippi and Louisiana were among the cheapest.
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There has not been a comparable rise in price in American grocery stores during this time. Based on data from the U.S. Bureau of Labor Statistics (BLS), from February to June, the last available month, the price index for household products increased by only 0.9%.
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The dynamics of individual products varied markedly. Milk rose the most – by 7.2%, while rice increased by 1.4%. At the same time, eggs fell by 14.4%, while the prices of bread, bananas and flour decreased by less than 2%.
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The cost of whole fresh chicken and ground coffee has hardly changed. The goods considered form only a part of a much broader consumer basket of the BLS and do not determine the movement of the overall index by themselves. Nevertheless, their dynamics show that there was no simultaneous rise in the price of basic products by June.
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Unlike gasoline, the cost of food depends not only on fuel and transportation, but also on the cost of raw materials, processing, packaging, storage and labor. Therefore, oil fluctuations may have a weaker effect on store price tags, and the impact of increased transportation costs may be delayed.
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Thus, the fuel market reacted quickly to the disruption of navigation through the Strait of Hormuz, while there has not yet been a comparable jump in food prices. At the same time, product data ends in June and covers a shorter period, so it is not yet possible to definitively assess the impact of the July rise in oil and gasoline prices on American stores.
