US gas prices rose to their highest level in four years on Thursday, reaching an average of $4.18 per gallon at the pump as US-Israeli peace talks with Iran remain at a standstill. The last time average US gas prices breached $4.15 a gallon was in April 2022, when oil prices soared shortly after Russia invaded Ukraine. Average gas prices are now $1 higher than just a year ago, when they were closer to $3.15 a gallon.
State-by-State Variations
Average gas prices vary heavily by state, with oil-producing states seeing averages as much as $2 a gallon lower than states that import gas. In Texas, gas is $3.72 a gallon, while California sees an average of $5.96 a gallon.
Oil Prices Surge
By Tuesday morning, Brent crude, the global benchmark, hit $111 a barrel, lower than its high of $119 a barrel seen last month but nearly 60% higher than averages before the start of the war. WTI crude, the US benchmark, was near $100 a barrel on Tuesday morning.
Oil prices rose on Tuesday after news that negotiators remain gridlocked over talks to reopen the Strait of Hormuz, where a fifth of the world's oil and natural gas typically passes through.
Political Developments
Donald Trump reportedly told advisers on Monday he is not happy with Iran's proposal to reopen the strait, which would require the US to end its own naval blockade and does not address a nuclear deal. On Tuesday, Trump said on social media that Iranian leaders told him the country was in a "state of collapse" and want to open the strait "as soon as possible, as they try to figure out their leadership situation."
Also on Tuesday, the United Arab Emirates announced it would leave the Opec oil cartel, which has been struggling to clear exports through the strait because of the war. This news is a big win for Trump, who has accused the group of "ripping off the rest of the world" by colluding to raise oil prices.
Impact on Oil Companies
Higher oil prices have been a boon for western oil companies, which have found themselves with an advantage over their competitors in the Middle East affected by the war. BP on Tuesday said its profits had more than doubled in the first quarter of the year, reaching $3.2bn (£2.4bn).
