Stockpiles of oil and gas hitting historic lows, threatening to push gasoline prices higher: experts

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Inventories of oil and gas around the world are starting to run dry as a result of the war in Iran, which threatens to drive up the cost of gasoline even further.

Even an immediate opening of the Strait of Hormuz wouldn’t likely prevent a rise in gasoline prices, the Washington Post reported. The waterway is a vital trade route through which 20% of the world’s crude oil flows, as well as liquefied natural gas and petrochemicals. Since the conflict began at the end of February, vessel traffic through the strait has been severely restricted.

Jim Burkhard, global head of crude oil research at S&P Global Energy, told the Post that global inventories have been “surprisingly effective” at providing shock absorbers, but their effectiveness is diminishing.

Chevron CEO Mike Wirth and Exxon Senior Vice President Neil Chapman said they have drained their reserves to historic lows.

The average gasoline price for the U.S. on Thursday was $4.21 per gallon, and the average price for diesel was $5.39 per gallon, according to AAA. Gas prices were down from $4.43 a week ago and $4.46 a month ago. This time last year, they were at $3.14.