Oil prices impact hit US gas stations! Gasoline prices return to $4.50 after four years, getting closer to the "demand destruction line".

Gas prices in the US have surpassed the crucial $4.50 per gallon mark for the first time since July 2022, highlighting the pressure drivers in North America are facing due to a new round of Middle East geopolitical conflicts, with gas prices continuing to rise. The geopolitical conflict that erupted on February 28 has severely disrupted the global energy supply market, with shipping in the Strait of Hormuz, which accounts for about 20% to 30% of global oil and natural gas transport share, almost completely halted, leading to supply shortages and a significant spike in oil prices, causing the international oil price benchmark for the first quarter - Brent crude futures prices to rise by 50%. According to data from the American Automobile Association, on Tuesday, the average retail price of regular unleaded gasoline nationwide in the US rose to $4.54 per gallon, currently about 50 cents below the record high of $5.01 set in June 2022. From a seasonal perspective, prices are at their historical highest levels during this period of the year. US President Donald Trump has repeatedly promised that once the Iran war ends, gas station prices will significantly decrease; however, the longer gasoline prices remain near historical highs, the greater the political risk faced by the Republican Party in the upcoming November midterm elections. Rising fuel costs also present a risk to California Governor Gavin Newsom, with expectations that he will run for president in 2028. Gas prices in California, the highest in the US, have already exceeded $6 per gallon for motor vehicle fuel; gas prices in the US Midwest have also risen rapidly, with some key states approaching the $5 mark. High gas station prices are adding to the economic pain of North American drivers, increasing inflation and dampening consumer confidence. After the US and Iran announced the cessation of hostile exchanges and air strikes, average prices had a slight decline in April, but never fell below the $4 per gallon level reached in mid-March. Since the start of the Iran war, US gas station prices have risen by over $1.50, and following US President Trump's latest statement about significant progress in US-Iran negotiations, the market will be watching for any breakthroughs that could bring an end to the geopolitical conflict. Patrick De Haan, the head of petroleum analysis at GasBuddy, said that the $5 per gallon threshold is often a moment of "shock and awe" that significantly disrupts North American oil demand. He added that while US consumer spending remains strong, consumption at the gas pump could be significantly reduced due to higher costs. US national gasoline inventories are at their lowest levels during this period of the year since 2014, and Wall Street financial giant Morgan Stanley predicts that gasoline supply will further tighten after entering the summer, indicating a potential historic seasonal low. The US gasoline futures prices, a key benchmark for energy prices, hovered around $3 per gallon for most of the Middle East geopolitical conflict but surged to their highest levels since June 2022 in the last week of April. Recent reports show that traffic in the Strait of Hormuz remains near a "trickle" state: about 6 ships passed through within a 24-hour period around April 29, significantly lower than the pre-war normal level of about 125-140 ships per day; Goldman Sachs also warned that global oil inventories are approaching an eight-year low, especially with refined product buffers rapidly thinning. In other words, the market has moved from the first stage of "geopolitical risk premium" to the second stage of "inventory consumption trade." The true significance of the simultaneous warnings from the three global energy giants ExxonMobil, Chevron, and ConocoPhillips is that the global oil market is losing three firewalls: commercial inventories, strategic reserves, and floating storage. As long as the flow in the Strait of Hormuz remains low, with each day of inventory depletion, the market moves closer to transitioning from "filling the inventory gap" to "price-destroying demand" rebalancing mode.