Rising fuel prices amid the war with Iran have cost American households over $100 billion in additional expenses. According to a spending tracker published by the Watson Institute for International and Public Affairs at Brown University, U.S. gasoline prices are currently at their highest level ever for this time of year, averaging $4.15 per gallon. This marks the first time the national average has exceeded $4 per gallon on Labor Day.
Total additional consumer spending in the U.S. due to the rising cost of gasoline and diesel since the conflict began in late February has already reached $101.1 billion. On average, each household has incurred $423 in extra gasoline costs and $349 for diesel, which reached a record $5.90 per gallon. In total, the additional burden amounts to $772 per household.
Oil price forecasts
These additional costs continue to climb as the conflict drags on and oil prices approach $100 per barrel once again. They could rise even faster if, as Goldman Sachs has warned, global oil prices climb to $120 per barrel or higher.
Goldman Sachs analyst Daan Struyven stated in a research note released on Sunday that he expects shipping disruptions in the Middle East to continue through 2027.
The updated Goldman Sachs forecast predicts the price of Brent crude will fall to $85 per barrel by December. This is $5 higher than the previous forecast. For 2027, the bank expects an average Brent price of $80 per barrel, up from its previous estimate of $75.
Daan Struyven noted that a sharp spike in crude oil prices may not occur, as producers are adapting to disruptions, China‘s oil imports are sensitive to price changes, and onshore oil inventories have only declined moderately—from 9.1 billion barrels before the war to 8.6 billion barrels now.
At the same time, Daan Struyven and his team emphasized that risks to the price forecast remain significantly skewed to the upside, especially in the near term. The price of Brent could exceed $120 per barrel if production in Persian Gulf countries remains lower or if attacks in the Strait of Hormuz and the Red Sea intensify.
Source: Yahoo
