Oil is moving through the Strait of Hormuz again, why are gas prices still above $4.30?

Oil exports from the Gulf have recovered, but American drivers are still paying far more than before the Iran war. The national average for regular gasoline stood at about $4.36 a gallon on October 11, according to AAA.

Improved traffic through the Strait of Hormuz has helped ease supply pressure. Yet moving oil remains expensive, and traders worry that another attack could reverse the recovery.

Analysts told ABC News that those costs and fears are keeping gas prices elevated. Cheaper crude also takes time to translate into savings at the pump.

Has Oil Supply Through the Strait of Hormuz Recovered?

Tracking firm Kpler said Gulf oil supply, excluding Iran, had returned to pre-war levels. Tanker traffic through the strait had improved significantly from its wartime low.

Alternative routes have helped. According to Kpler, roughly four in every 10 barrels leaving the region now bypass the Strait of Hormuz, as per a report by ABC News.

More exports offer relief, but recovered volume does not mean transportation has returned to normal. Companies continue to face risks while moving crude through the region.

Why Are Shipping Costs Keeping Gas Prices High?

Some tankers transfer oil directly to other ships at sea to reduce exposure to attacks. Those transfers add expense to the journey.

Crew costs have also risen. The Financial Times reported that some tanker captains were receiving higher pay for dangerous trips.

Christopher Tang, a supply-chain professor, told ABC News that transport costs remained high while the war continued. Those expenses travel through the supply chain and affect what drivers pay.

Why Haven’t Falling Oil Prices Brought Faster Relief?

ABC News reported on October 8 that West Texas Intermediate crude was around $92 a barrel. It had fallen roughly 9% since September 15, but remained more than 40% above pre-war levels.

Gas stations also need time to sell fuel purchased at higher prices. Tang said retailers hesitate to cut prices quickly when markets fluctuate, seeking to protect their margins.

The result is a delay between cheaper oil and cheaper gasoline. Improved supply can help without restoring the prices drivers remember.

Could Another Attack Push Prices Higher?

Traders remain concerned about renewed fighting and damage to oil infrastructure. Saudi Arabia’s East-West pipeline illustrates the uncertainty. The route helps oil bypass Hormuz, but temporarily closed after an attack last month. Its recovery has not removed fears of further disruption.

Hugh Daigle, a University of Texas at Austin professor, told ABC News that markets were pricing in the possibility of conditions deteriorating again. American production offers no complete shield. Oil trades globally, so disruption elsewhere can raise costs for US consumers too.

FAQs:

What are US gas prices now?

AAA recorded an average of approximately $4.36 on October 11.

Has Gulf oil supply recovered?

Kpler says supply excluding Iran has returned to pre-war levels.