US Gasoline Prices Volatile Amid Geopolitical Tensions and Russian Oil Attacks

National average gasoline prices in the United States reached $4.05 per gallon last week, a marginal decrease of 0.8 cents. Despite this dip, GasBuddy predicts national averages could hit a historic high for this calendar period by later this week. Regional trends vary significantly, with Michigan prices rising 13 cents to a state average of $4.36, the highest since May. In the Peoria-Pekin metro area of Illinois, averages climbed to between $4.33 and $4.35 per gallon, while Minnesota saw a decline of 10.1 cents to $3.94.

Patrick De Haan of GasBuddy attributes this volatility to a conflict between two primary drivers. Ukrainian attacks on Russian oil infrastructure have caused output to plummet, pushing refined product prices higher. Conversely, oil markets saw a slight pullback on Sunday night after President Donald Trump signaled that a potential deal with Iran may be in progress.

Further pressure on prices stems from domestic supply constraints. The Energy Information Administration reported that U.S. crude oil inventories fell by 7.2 million barrels to 404.5 million barrels, which is roughly 7% below the five-year average. This decrease in inventory, coupled with rising gasoline demand, contributed to the price spikes seen in several states.