Gas prices went up primarily due to a combination of factors:
- Geopolitical tensions, particularly rising conflicts and instability in the Middle East, such as escalating hostilities between Iran and Israel, have driven oil prices higher recently by causing supply concerns globally. This has particularly impacted countries reliant on oil imports from the region.
- Although global oil production has increased sharply with OPEC+ reversing its production cuts ahead of schedule and countries like the U.S., Brazil, and Guyana boosting output, demand growth has been weaker than expected. Yet, supply disruptions or refinery issues, along with geopolitical uncertainties, can cause short-term price spikes.
- Seasonal factors and policy-related costs also influence gas prices. Summer blend gasoline costs more, and state and federal taxes contribute to the final price at the pump. Market forces, like how quickly gas stations adjust prices to match changing crude oil replacement costs, also play a role.
- While production increases tend to put downward pressure on prices, risks such as potential sanctions, damage to refineries from hurricane season, and political decisions impact price volatility.
Overall, gas prices fluctuate based mainly on crude oil prices driven by supply-demand dynamics and geopolitical risks, with recent rises linked strongly to Middle East tensions and ongoing uncertainties despite higher global oil production.
