No relief in sight for U.S. drivers as gas and diesel prices surge

Gas and diesel prices have continued to rise, with energy experts predicting they will keep climbing due to geopolitical conflicts overseas. The national average for gasoline jumped 7 cents to $4.44 a gallon overnight, a nearly 50% increase since before the Iran war began in February. Diesel, crucial for transporting goods, hit a record $6.40, up 77 cents since early September.

Experts project gas could reach $4.50 a gallon later this week, and diesel could go as high as $6.60 a gallon by this weekend. The ongoing conflicts in the U.S.-Iran and Russia-Ukraine wars have reduced global oil supply, increasing the likelihood of further price hikes. Some states, like California, have already surpassed the projected benchmarks, with diesel costing an average of $8.35 a gallon.

Motorists may respond to higher gas prices by driving less, but reducing diesel consumption is challenging as it's widely used in essential commercial activities. Elevated diesel prices could also lead to increased utility bills for residents, particularly in the Northeast where around 4 million households rely on heating oil. Geopolitical conflicts have driven crude oil prices higher, raising gasoline and diesel costs for Americans.

The two wars, including the Iran war and the Russia-Ukraine conflict, look like they may be a three-way conflict. Fuel prices are rising due to reduced refining capacity both overseas and in the U.S., exacerbating the global oil shortage. The Midwest is particularly hard-hit due to an ExxonMobil refinery in Chicago that had to halt production after a power outage.

Attacks on oil infrastructure, such as the Houthi rebel attack on the East-West pipeline in Saudi Arabia, have further impacted oil supply. The attacks on the East-West pipeline cut 4 million barrels per day from the global market. Ukrainian drone strikes targeting Russian oil infrastructure have dealt a significant blow to Russia's refining capacity, reducing the world's refining capacity.

While conflicts are far away, the economic pain is felt close to home, with American drivers in some states paying significantly more than the national average to fuel their cars.