Expert astounded by red state gas price explosion since war began: 'Look at this!'
President Donald Trump's Iran war is driving gas prices to unprecedented levels, CNN's Matt Egan told anchor Kate Bolduan on Thursday morning.
"Where is it headed?" asked Bolduan. "When's there going to be a break? Any time soon?"
"Well, Kate, I mean, that was fast, right?" said Egan. "The oil price crash is already over, at least for the moment. As you noted, futures moving significantly higher for oil right. US oil prices now flirting with $100 a barrel, again up 5 percent."
This comes despite a major price drop following Trump's announcement of a ceasefire deal in Iran, noted Egan. "WTI, the U.S. benchmark. Yesterday it was down by 16 bucks. That's the most in any single day in terms of dollars since oil futures started trading back in the 1980s. But the fact that they're already moving higher again, Kate, really underscores the fragile nature of this ceasefire and the fact that this is not going to be easy, right? This is not like flipping back on a light switch, right? We have infrastructure in the region that's got to get repaired. There's been personnel that's been evacuated. They have to return."
"Foreign leaders have said it's going to take years to repair some of that," added Bolduan.
"Yeah, absolutely," agreed Egan. "This is going to take time, money and confidence. But the most immediate problem is this the Strait of Hormuz, right? The fact is that even though reopening the strait is a crucial part of this ceasefire agreement, the data shows that the traffic through the Strait at this point has been negligible, right? Far, far shy of the roughly 100 or so ships that would normally be transiting this waterway, some of them carrying oil and energy that's needed to go to the rest of the world, right? And so again, this is going to take some time."
"So what does all this mean when it comes to gas prices?" said Egan. "Now as you noted, gas prices did inch higher again. Remember, gas moves with a lag to oil. So this is just a fractional increase to just under $4.17 a gallon, well above where things were before the war started, and the highest level in almost four years. And when you look at the trend, I mean, it's just been this dramatic spike that really began just at this yellow line."
Even worse for Trump, noted Egan, this is hitting Republican-voting states particularly hard.
"Some of the states where prices are going up the fastest include those Trump states like Arizona, Utah, Wyoming, and Alabama, Tennessee, Kentucky as well," said Egan. Furthermore, "history shows that prices, they tend to go down a lot slower than they went up in the industry. It's known as prices going up like a rocket, but down like a feather. And even in the best-case scenario, right, where the ceasefire holds and the Strait actually reopens, it's going to take months before we get back to anything close to those pre-war prices."
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