The conflict in the Middle East has led to disruptions in the passage of the Strait of Hormuz, compounded by the UAE's withdrawal from OPEC, causing a continued surge in U.S. gasoline prices. On April 28, the national average price reached $4.17 per gallon, marking a four-year high and representing an increase of approximately 40% from $2.98 on February 26 before the outbreak of the conflict. Despite Trump's optimistic prediction of a significant drop in oil prices, his escalation of threats and statements regarding prolonged blockades have exacerbated market concerns. The spike in oil prices is impacting consumer spending and adding pressure to the outlook for U.S. inflation.
The ongoing escalation of conflicts in the Middle East, coupled with the UAE's announcement to withdraw from OPEC, has pushed US gasoline prices to their highest level in four years, placing multiple pressures on the energy market.
On April 28, GasBuddy analyst Patrick de Haan posted on the X platform that the national average gasoline price reached $4.17 per gallon that day, the highest since 2022, surpassing the previous record of $4.16 set earlier this month. He predicted that prices would continue to rise. According to data from the American Automobile Association (AAA), the average price of regular gasoline was slightly above $4.17, up 6 cents from the previous day, while diesel prices rose to $5.46 per gallon.
Although Trump expressed optimism in mid-April that oil prices would "drop significantly" and be "much lower" before the midterm elections, he escalated threats publicly on April 26, stating that Iran's oil wells would initiate a destructive process within three days. Once they "explode," Iran will never be able to restore its original production capacity. According to reports by Xinhua News Agency, Trump has informed his aides to prepare for a prolonged blockade of Iran.
The surge in oil prices directly impacts consumer spending and exacerbates market concerns about inflation prospects. However, amid uncertainties surrounding Iran and ongoing tensions in the Strait of Hormuz, whether the market will see substantial relief in the short term remains highly uncertain.
Middle East conflicts, compounded by the UAE's 'withdrawal,' intensify upward pressure on oil prices.
The immediate trigger for this round of rising oil prices is the obstruction of passage through the Strait of Hormuz due to Middle East conflicts. According to AAA data, on February 26 — two days before the outbreak of the Middle East conflict — the national average gasoline price in the US was approximately $2.98 per gallon. Since then, continued disruptions in strait shipping have impacted global oil supplies, driving prices higher.
The Strait of Hormuz is a strategic channel between Iran and Oman, through which about one-fifth of the world’s crude oil and liquefied natural gas is transported. Export vessels from OPEC Gulf oil-producing countries have been obstructed. While the Trump administration maintains a maritime blockade of Iranian ports, it continues to pressure for the reopening of the strait.
Oil price trends are also influenced by another major variable. On April 28, the UAE announced its withdrawal from OPEC, further unsettling the global energy market. UAE Energy Minister Suhail Mohamed al-Mazrouei stated that this decision was made after reviewing the country’s energy strategy and without prior communication with any other nations.
The UAE's withdrawal weakens OPEC's control over global oil supply and deepens the rift between the UAE and Saudi Arabia. Against the backdrop of export disruptions faced by OPEC Gulf member states due to tensions in the Strait of Hormuz, this development adds further complexity to the market's supply outlook.