American consumers have spent an additional 100.9 billion USD on gasoline and diesel alone since the Middle East conflict began in late February. This figure, equivalent to 770 USD per household, is likely to increase as fuel prices remain high, according to the cost tracker from the Watson Institute for International and Public Affairs at Brown University.
"We are entering the most expensive autumn for gasoline prices ever, but more concerning is diesel. Rising diesel prices will lead to cost adjustments across all sectors," Tom Kloza, chief energy advisor at Gulf Oil, stated on CNN last weekend.
The Watson Institute's research measures the financial burden on consumers by comparing actual energy prices with a "no conflict" scenario. While energy prices have not surged as dramatically as many feared, the tracker indicates that the conflict is eroding Americans' incomes.
For gasoline alone, consumers have spent an additional 55 billion USD, averaging 422 USD per household. According to the American Automobile Association (AAA), gasoline prices reached a three-month peak on 8/9, exceeding 4.15 USD per gallon (1.1 USD per liter).
Last year, the price was 3.2 USD, and before the conflict, it was around 2.98 USD. However, gasoline prices have significantly cooled from 4.56 USD in May and the record 5.02 USD in 2022, following Russia's military campaign in Ukraine.
Diesel, an essential fuel for trucks, trains, tractors, and boats, is also at a record high. The average price for a gallon of diesel is currently 5.90 USD, up from 3.76 USD before the conflict. This level surpasses the previous record set in 2022.
Americans have spent an additional 46 billion USD on diesel alone, averaging 348 USD per household, according to the Watson Institute.
This fuel has increased by over 60% since the start of the year and is almost certain to record its largest increase in 26 years, according to AAA data. Some analysts warn that prices could climb even higher.
Goldman Sachs raised its December Brent crude oil price forecast to 85 USD per barrel. The bank projects an average price of 80 USD per barrel next year, an increase from its previous forecast of 75 USD. Current Brent prices stand at 99.4 USD per barrel.
Goldman Sachs suggests that Middle East oil production will only recover from the second half of next year. The bank also warns that Brent prices could exceed 120 USD if production in the Gulf region remains significantly lower than pre-conflict levels.
However, the issue extends beyond high oil prices. The world currently lacks sufficient refineries to convert crude oil into gasoline, jet fuel, and diesel.
Three of the four major global refining centers – the Middle East, Russia, and Trung Quoc – face operational restrictions due to the conflict and export limitations. Refineries in the U.S. are operating at full capacity to compensate for this shortfall.
"This is a quiet but deeply concerning crisis," Kloza commented.
The August consumer price index (CPI) for the U.S. will be announced on 11/9, likely indicating a 3.4% increase compared to the same period last year. With inflation remaining well above the 2% target, the Federal Reserve (Fed) is expected to seriously consider raising interest rates at its policy meeting next week.
Ha Thu (according to CNN, Reuters)
