US Gas Prices Near Record High

Summary

Kevin Crowley discusses the impact of the Strait of Hormuz blockade on oil markets, noting Brent crude settled at $109 and the futures curve is steepening. He explains the political sensitivity of US gasoline prices and why policy options like a federal gas tax cut or windfall profits taxes are difficult to implement. The interview also covers long-term pipeline projects by the UAE to reduce reliance on the Strait of Hormuz.

• Brent crude settled at $109 a barrel, up 10% for the week, with no progress in Trump-Xi meeting on Iran.
• The crude futures back end is creeping higher, with year-end delivery at $80, signaling markets expect no short-term solution.
• 20% of the world's oil and gas production passes through the 21-mile Strait of Hormuz choke point.
• The UAE is fast-tracking an East-West pipeline to double export capacity outside Hormuz, aiming for next year.
• US gasoline prices are near record highs, but the federal gas tax cut of 18¢ would only provide minor relief.
• Politicians fear high gas prices, which historically have strong political impact even though they represent only about 2% of disposable income.