US gas prices hit $4/gallon, now higher than any point under Trump

[0:00] The national average for a gallon of gas is higher than four dollars. This is the highest in nearly four years, higher than any point during the president's two terms. West Texas crude oil prices, the U. S benchmark, they settle at their highest point in four years and you can see they're actually up from what they closed at last night, which I said was pretty high already. Let's get a CNN senior reporter Matt Egan who is here with us in this $4 a gallon. I mean this is a [0:30] benchmark, a pretty big psychological barrier. Yeah, a huge psychological barrier and one John that was unthinkable when the year started right $4 a gallon gas in March. But here we are. So the new national average 402 that is well above the 298 a gallon before the war started significantly higher than 3 17 at this point last year. An analyst warned that the national average could approach or even take out the all time high of $5 a gallon. [1:00] That was set four years ago after Russia invaded Ukraine and look drivers in some parts of the country. They're already facing significantly higher prices, right? 4 20 a gallon or higher in Illinois, Utah, Arizona above $5 in Washington state approaching $6 in California. Now obviously this is all about the fact that the war has set up this epic supply disruption, right? Bigger than after Russia invaded Ukraine, bigger than the first goal for the second goal for that's why old prices have skyrocketed. [1:30] As you mentioned, US crude topping $100 a barrel, settling above that level for the first time in four years yesterday and trading above there today as well. The problem is that the market just cannot function if the Strait of Hormuz remains shut down and overnight we had another fully loaded oil tanker off the coast of Dubai that was struck by what Kuwaiti officials have blamed on an Iranian drone attack and the investment bank Macquarie out of Australia. They're warning that if this [2:00] war continues and it lasts through June and the Strait of Hormuz remains shut, you could see far higher prices. Oil could hit $200 a barrel. John, that does not equate to $5 a gallon gas or six, but something like $7 a gallon gas. Now I know $200 oil. That sounds kind of crazy, but some of the oil analysts that I'm in touch with, they're not dismissing this right of veteran analyst Bob McNally. He told me that high 100s or even yes, $200 is possible if this crisis continues [2:30] to drag on. And McNally, you know, he said the market has just stopped listening to Trump. He said they're not buying it anymore. Earlier in this crisis, the market kind of believed the president's comments around a quick ending to this war. But now there's a lot more skepticism, John. And so look, I think the bottom line is the Strait of Hormuz, right? If it can reopen, then you can see oil prices crash back to earth. But if not, then this pain at the pump could get worse before it gets better. And look, we'll see how they react to the news from the president that he's considering or hinting at the fact that the [3:00] United States may end its efforts there without reopening the Strait of Hormuz. With us now, CNN senior business reporter David Goldman. Great to see you. It's good to see you. So gas $4, two cents a gallon. And what strikes me is that a month ago was a dollar less. That's a big jump. Yeah. And you know, every dollar that gas prices rise, that's about $1,000 for American families over the course of a year. So this is a lot of pain for people. And it's not just at the pump. Remember, diesel prices are also rising. They're above [3:30] five. So now we're talking about everything that's on a truck gets more expensive. There's a lot of added cost here. And it doesn't look like it's going to stop anytime soon. Because President Trump today is talking about how the Strait of Hormuz might remain closed for some time. Now we're talking about maybe $150 oil, $200 oil, some analysts are saying yesterday. And that's a real possibility. That translates to maybe $5, $6 gas. That's a lower cost. [4:00] lot, a lot of pain for people. And these oil traders, I think, are faced with these conflicting [4:04] signals all the time, right? Yesterday, the president put out his tweet saying negotiations [4:07] are going well. We're talking to a much different Iranian regime than last night. And I happen to [4:12] be here working. There's a giant Kuwaiti tanker on fire there. And so you have these conflicting [4:17] forces. Well, that's right. And, you know, if you look at the oil market, they're telling us [4:22] a signal, right? They're giving us a sense of what to expect from this war. Right now, [4:27] Brent crude, that's the international benchmark, that's trading at about $110 a barrel. If you go [4:35] out, though, because you can buy futures for next month and the following month and the following [4:41] month, and those are falling off pretty quickly, that gives us a sense that, well, OK, oil might [4:46] start to fall a little bit, but we don't get back down to $70 a barrel, which is where we were [4:52] before this conflict started until 2032. Oh, wow. [4:57] So this means that for six years, the oil market is saying that we're going to be above where we [5:03] were before the conflict started. And that's a bad signal for the economy. It means that [5:08] we could have high gas prices, high oil prices for quite some time. [5:12] Yeah. Adios to $3 a gallon for gasoline, maybe years before we get that back. [5:16] That's right. [5:17] David Goldman, great to see you this morning. Thank you very much. [5:19] The Wall Street Journal reports this morning that President Trump is considering ending the war [5:24] without reopening the Strait of Hormuz. [5:27] And just moments ago, President Trump put out a statement on social media that doesn't exactly [5:32] contradict that report. The president wrote, all of those countries that can't get jet fuel [5:36] because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the [5:41] decapitation of Iran, I have a suggestion for you. Number one, buy from the U.S. We have plenty. [5:46] And number two, build up some delayed courage, go to the Strait and just take it. You'll have [5:52] to start learning how to fight for yourselves. The U.S. won't be there to help you anymore, [5:56] just like you. [5:57] You weren't there for us. Iran has been essentially decimated. The hard part is done. Go get your own [6:02] oil. And then it's signed President D.J.T. All right, let's get right to CNN. Senior National [6:09] Chief National Security Analyst Jim Sciutto, who's in Tel Aviv this morning. Jim, it's a pretty [6:14] remarkable statement from the president, which almost seems to confirm that he's considering [6:19] leaving the Strait of Hormuz to somebody else. [6:22] Well, John, you see a great shifting of the responsibility there, right, to solve a problem [6:27] that didn't exist before the war, that is, the closure of the Strait of Hormuz. President Trump, [6:32] after raising the possibility of forcing it open, threatening Iran in various ways, positioning [6:38] forces in this region to take it by force, as well as Iran's oil facilities on Karg Island, [6:47] he is now saying, in so many words, not our problem. Now, the president could change his [6:52] mind again. He's changed his mind multiple times in his public statements since the [6:57] start of this war, but at least appears to be laying the rhetorical groundwork to end [7:04] the war, declare victory perhaps, but without solving that key problem, which is now causing [7:09] major, major global economic implications, including for America's allies, particularly [7:15] those in Asia that depend on oil from here. [7:19] Let's talk about the price of gas specifically, if we could. So, as I just noted, the average [7:22] price for a gallon of gas in the here, here in the U.S., now above four dollars a gallon. [7:26] This is having such an important ripple effect across the global economy. Jet fuel certainly [7:33] getting a lot of attention, Eleni. [7:35] Yes, absolutely. So what this war has exposed is the Achilles heel of the global economy, [7:41] Erica. No doubt this war isn't just contained to the Gulf region, but it's actually has [7:46] a chain reaction around the world. When I see gas prices in the United States hitting [7:51] over four dollars a gallon, this is the highest level since twenty twenty two when Russia [7:57] came in. Markets are interconnected. You know, President Trump keeps talking about the United [8:00] States being energy independent, but because everything is so connected, people in America [8:05] are feeling it at the gas pump. And in fact, we've seen ripple effects around the world [8:09] economy. Jet fuel price is really fascinating. I was looking at what they've been doing over [8:13] the past month. They've doubled. They're up one hundred and four percent. If you break [8:17] that down further into Asia and Oceania, you've got jet fuel prices, so refined jet fuel, [8:23] up one hundred and thirty four percent. In North America, jet fuel prices are up eighty [8:27] eight percent. So we're talking about a massive impact here. So the overall closure of the [8:33] Strait of Hormuz is not just about twenty million barrels of oil passing through, but [8:36] it was also those refined crude products that includes jet fuel. Erica, I really appreciate [8:43] the reporting. Thank you.