US petrol tops $4.50 for first time since 2022, fuelling election pressure on Trump

The average retail price of gasoline in the United States has climbed above $4.50 a gallon for the first time since July 2022, as disruptions to global oil flows through the Strait of Hormuz continue to ripple across energy markets amid the ongoing US-Israeli conflict with Iran.

Data from GasBuddy showed the national average at $4.52 a gallon on Wednesday morning, marking a sharp increase just weeks ahead of the Memorial Day weekend — the traditional start of the US summer driving season.

The surge in pump prices comes as crude markets remain volatile, with the global Brent benchmark rising roughly 58 per cent since the conflict began. The rally has been driven by fears of prolonged supply disruption in West Asia.

Political heat builds ahead of midterms

The spike in fuel prices is emerging as a key political risk for Donald Trump and the Republican Party, with midterm elections due in November. Elevated petrol prices during peak driving season have historically weighed on incumbent governments, amplifying voter dissatisfaction over the cost of living.

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Analysts warn that without de-escalation in West Asia, US fuel prices could rise further and potentially test or exceed previous records set during the 2022 energy crisis following Russia’s invasion of Ukraine.

Gasoline prices had already crossed the $4 mark in late March, a level last seen in August 2022, before accelerating sharply in recent weeks.

Supply risks and refinery disruptions compound pressure

A recent outage at BP’s 440,000-barrel-per-day refinery in Whiting, Indiana, one of the largest in the US, temporarily shut down a key processing unit, tightening supply in the Midwest. While operations have since resumed, the incident highlighted vulnerabilities in the refining system at a time of already constrained supply.

Inventories tighten despite resilient demand

Fuel inventory data points to a tightening market. According to the Energy Information Administration, US gasoline stocks fell by more than 6 million barrels last week to 222.3 million barrels — the lowest level since December and below the five-year seasonal average.

Morgan Stanley estimates that inventories could drop below 200 million barrels by late August, nearing historical lows for the summer months if current trends persist.

Notably, demand has held firm despite rising prices. US gasoline consumption averaged 8.95 million barrels per day over the past four weeks, up 1 per cent from a year earlier — suggesting that higher prices have yet to significantly curb driving activity.

Oil markets remain volatile amid fragile ceasefire

Crude oil prices have shown sharp swings in recent sessions as markets respond to developments in West Asia. A fragile ceasefire has helped temper some gains, but intermittent exchanges of fire have kept traders on edge.

US West Texas Intermediate crude was trading near $102.42 per barrel in early Wednesday trade, while Brent crude settled around $109.87 after a volatile session.

Meanwhile, data from the American Petroleum Institute indicated that US crude inventories fell by 8.1 million barrels last week, marking the third consecutive weekly decline. Gasoline and distillate stocks also posted significant draws, reinforcing concerns about tightening supply conditions.