Diesel prices in the United States have reached a record average of $5.85 per gallon, surpassing previous peaks observed during the onset of the conflict in Ukraine. According to data from the American Automobile Association (AAA), this represents a significant increase from the $3.71 average recorded at this time last year. The surge is largely attributed to escalating tensions in the Middle East, specifically the closure of the Strait of Hormuz by Iran, which has disrupted the transit of approximately one-fifth of the world’s oil supply.
Because diesel is the primary fuel for commercial transport, including trucking, farming, and construction, the price hike is placing substantial pressure on the US economy. Regional disparities remain significant; for instance, drivers in Washington are currently paying $6.81 per gallon, compared to $5.03 a year ago. Petrol prices have also seen a sharp rise, climbing to an average of $4.15 per gallon.
In an effort to mitigate these costs ahead of the November midterm elections, President Donald Trump has announced a new oil agreement with Venezuela. The deal involves the development of 17 strategic oil fields, which are estimated to hold 65 billion barrels of oil. Interim Venezuelan President Delcy Rodríguez stated that the project expects to generate over $100bn in investment and $209bn in tax revenue. A US official confirmed that the American government will maintain a 55% stake in a joint venture with a private operator to manage the fields.
Despite the administration's efforts, some market analysts have expressed doubt regarding whether the agreement can overcome long-standing structural challenges within the Venezuelan oil sector. Meanwhile, the economic strain has impacted the political landscape, with recent Reuters/Ipsos polling showing President Trump’s approval rating at 33%.
Source: BBC News
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