If you’re going anywhere this weekend that involves an automobile, we’d like to offer two pieces of advice.
- No matter what happens, have fun, if that’s why you’re on the road. It’s a holiday weekend. Or maybe a college graduation. You’re allowed.
- Yes, take a deep breath if you drive into a gas station. It will be painful.
Gas prices are up all across the United States and the world. AAA’s national average price of gas this week was $4.564 a gallon. That is the highest price in nearly four years and up 61% this year.
We are most sorry about noting these numbers. But we drive cars, too, and are just as shocked as you at the damage higher gas prices are having.
In fact, gas prices are just as high as they were in the summer of 2022, when the global economic was recovering from the Covid-19 pandemic and absorbing the shock of Russia’s invasion of Ukraine. Gas prices jumped 53% between the end of 2021 and AAA’s peak of $5.017 on June 14, 2022.
Drivers may even get a little price relief over the weekend, says Denton Cinquegran, chief oil analyst at the Oil Price Information Service, the company that compiles AAA’s data.
Crude oil prices have come down $8-to-$10 a barrel since May 18, Cinquegrana noted in an interview with theStreet.
That’s mostly due to hopes that a peace deal will be worked out between Iran and the United States, he said. But the Trump Administration has claimed regularly since the Iran began on Feb. 28 that the Iranian government is about to give up.
However, there’s no guarantee a deal will emerge. So, motorists will just have to gnash their teeth when they pay for a fill-up.
Americans are hitting the road
A lot of Americans will be traveling this weekend: 45 million is AAA’s estimate. About 39 million will be driving, and 3.9 million will fly.
As happens with gasoline prices in the United States, however, what you’ll pay if driving will vary depending on location.
While the national average, as of May 21, was $4.564 a gallon. It was “just” $4.017 in the state of Mississippi, lowest in the nation, and $3.89 in Sunflower County in the northwest portion of that state.
It was $6.143 on average in California. And $7.04 a gallon in Mono County, located behind the Sierra Nevada mountains and adjacent to the state of Nevada. And $6.575 in Eureka, on the far northern coast.
We checked around about where gas prices might be if you’re traveling.
- Headed to Indianapolis, Ind., for the Indianapolis 500 auto race? The average around in Indy is about $4.07 a gallon.
- On the Gulf Coast of Mississippi, near New Orleans, it will be about $3.934.
- Going to Chicago for a Cubs game will mean fuel prices at about $5.25.
- Stopping in Boulder, Colo. on your way to the Rocky Mountains will run you $4.834 a gallon for a fill-up.
What happens after the weekend’s fun ends
Any one who says they really know is guessing.
Iran has been able to control the Strait of Hormuz, the narrow water leading from the Persian Gulf into the Indian Ocean. Before the U.S. and Israel attacked Iran for the second time in less than a year, about 20% of the world’s crude oil went through the Strait every day.
Now, it’s next to nothing, and ships are at anchor on either side of the strait.
AFP / Getty Images
But that leads to big problems elsewhere, especially in Asia, which gets most of its oil from the Persian Gulf region. Complicating matters are several factors:
- Countries are draining their oil reserves.
- Persian Gulf countries, including Iran, unable to ship much oil at all, are running out of storage, and production is getting shut in.
- Iran doesn’t seem interested in offering terms the United States and Israel can accept. Iran wants its nuclear materials and reparations.
- And neither side appears ready to fight for control of the strait.
The standoff may extend all summer. There’s talk about gas tax holidays and loosening shipping rules. But the savings may be minimal at best, CNN’s Matt Egan suggested in a report this week.
So, expect high oil and gasoline prices to last indefinitely.
Until the global economy can’t take it anymore. And then watch out for the guns, suggested Bob McNally, an energy advisor to former President George W. Bush and now president of the Rapidan Energy Group, an energy consulting firm.
Related: Crude oil price spike signals harsh reality check