Fuel price pain may persist even if US-Iran deal eases tensions

Washington, June 14 (IANS) Even if the United States and Iran finalise a deal to reopen the Strait of Hormuz and end the conflict that has rattled global energy markets, American consumers and businesses could continue to feel the impact of higher fuel prices for months, according to energy experts and business owners interviewed by a leading media outlet.

The prospect of a memorandum of understanding between Washington and Tehran has raised hopes that one of the world’s most critical shipping lanes could soon return to normal operations.

“This morning, as the U.S. and Iran inch toward a potential deal to end the three-and-a-half-month war, Americans are still grappling with high prices brought on by the conflict here at home,” ABC News correspondent Elizabeth Schulze reported.

The conflict has pushed inflation to its highest level in three years, according to the report, with rising costs affecting fuel, groceries and air travel.

President Donald Trump has repeatedly argued that prices will fall rapidly once the conflict ends.

“It’s going to come down like a rock,” Trump said while discussing inflation and energy prices.

However, consumers interviewed by ABC News described a growing financial squeeze.

“It is really hard to keep up. I planned my gas budget money for one price and now — now it’s double that,” said Michigan resident Nyah Phillips.

“The prices are going up, but our wages are not reflecting and covering that gap of prices going up. So it is like a constant game of catch-up,” she added.

Business owners are also feeling the pressure.

James Burg, chief executive of a Michigan trucking company operating more than 100 trucks, said diesel costs have surged since the conflict began.

“Our spend has gone from about $70,000 a week to about $100,000 to $110,000 a week,” Burg said.

“There’s no question. We’re losing more margin now,” he said. “With higher costs of diesel.”

Energy analyst Bob McNally, founder and president of Rapidan Energy Group, said some oil has already begun moving through alternative routes, helping to ease market concerns.

“The good news in recent days and weeks is we’ve seen public reports that the Trump administration has been able to free up some of that trapped oil,” McNally said.

Still, he warned that the global oil market has suffered a historic shock.

“We’ve lost well over a billion barrels of oil in the world market,” McNally said.

Even if the Strait of Hormuz reopens, he cautioned that oil prices could remain under pressure through the summer because inventories have been depleted and emergency market buffers are being exhausted.

“Many analysts, us included, think there could be upward pressure on prices in July, in August, and maybe in September,” McNally said.

He warned that if negotiations collapse and shipping disruptions persist, crude prices could surge dramatically.

“I’m very concerned we could see oil prices skyrocket later this summer,” McNally said, adding that gasoline prices could return to record levels.

–IANS

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