The impact of the Middle East situation is evident: U.S. retail gasoline prices have reached their highest level in a year and a half!

Affected by ongoing Middle East conflict disrupting energy supplies, U.S. gasoline retail prices surged sharply this week, reaching the highest level since September 2024. Volatility in the energy market is rapidly passing through to consumer-end prices, with weekly gasoline futures gains expected to set the largest record since March 2022.

According to Bloomberg, data from the American Automobile Association (AAA) shows U.S. gasoline retail prices rose to $3.32 per gallon on Thursday. Gasoline futures have climbed by 27% this week, and if the rally continues to the weekend, it will mark the largest weekly gain in more than three years.

The report said rising oil prices are creating political pressure for the Trump administration. When presenting America's dominance in energy, Trump frequently showcased low oil prices as a policy achievement. This round of price increases is likely to become a significant obstacle for him and the Republican Party in the midterm elections later this year.

Currently, the tense situation in the Middle East has dealt a substantial blow to global crude oil supply chains. Asian refiners have been forced to interrupt critical crude oil supplies usually shipped through the Strait of Hormuz, with some refiners beginning to consider reducing processing volumes.

Seasonal transition and geopolitical shocks, dual pressure pushing oil prices higher

The report indicated that the current oil price surge is not driven by a single factor. The disruption of Middle East supply coincides with the annual spring routine of U.S. refiners shifting from producing winter-grade gasoline to higher-cost summer-grade gasoline. This annual practice typically pushes spring oil prices upward in a seasonal pattern. Coupled with current geopolitical shocks, the effect is compounded, intensifying price pressure.

For investors, the strong performance of gasoline futures and continued retail price increases mean the energy sector faces significant short-term uncertainty, and rising consumer-end spending pressure may also impact broader economic prospects.

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