Michigan’s gasoline prices dropped on average by a penny on Thursday, March 12, which normally wouldn’t be news but many were looking for any signs of hope – which quickly seemed to fade – as a worldwide energy crisis ensues.
Average gas prices at the pump dropped to $3.60 a gallon from $3.61 a gallon in Michigan, according to AAA, which tracks prices. The change was mostly a result of the announcement Wednesday that the oil reserves were opening.
Analysts note that regular gasoline prices in Michigan have gone up 20% since the U.S. air strikes on Iran began. Diesel, jet fuel and natural gas also have gone up, and so have the price of many other goods, including fertilizer.
“Americans today will spend roughly $250 million more on gasoline than they did 30 days ago,” Patrick De Haan, the head of petroleum analysis at GasBuddy, said on social media. Moreover, he highlighted reports that Iran’s new “Supreme Leader said the Strait of Hormuz must stay closed.”
About 20% of the world’s oil moves through the strait.
The tiny, one-day drop, combined with President Donald Trump’s declaration on Wednesday the U.S. “won” the war, seemed like a positive sign, but hope quickly evarporated with news of two oil tankers near Iraq on fire.
Iraq and Oman have reportedly suspended oil terminal operations.
Some European and Asian nations are now scrambling.
Denmark, CNBC reported, is so concerned about what appears to be a widening crisis that its energy minister begged citizens in an interview to “please, please, please” don’t drive unless it was absolutely necessary.
Public comments from U.S. officials also have sent confusing messages.
On Tuesday, March 10, Energy Secretary Chris Wright said on X that the U.S. Navy escorted an oil tanker through the strait, and the price of oil futures fell; but he quickly deleted it, and the White House denied that had happened.
Trump said the U.S. “won” the war, but needed to “finish the job.”
The International Energy Agency has described the crude oil disruptions in the Middle East as “the largest supply disruption in the history of the global oil market.”
The IEA, a Paris-based intergovernmental organization, initially seemed to calm markets by agreeing to put 400 barrels of oil from emergency reserves on the market, but that was short-lived.
The 32 member countries of the IEA unanimously agreed to the oil release over time to “address disruptions in oil markets stemming from the war in the Middle East,” calling the challenge “uprecedented.”
Oil futures went down Wednesday, but rose again to about $100 a barrel as fears persist and Iranian state media reported Majtaba Khamenei declared Iran is blocking the strait to avenge “the blood of the martyrs.”
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com
This article originally appeared on Detroit Free Press: Michigan gas prices drop slightly, but oil crisis could get worse
Reporting by Frank Witsil, Detroit Free Press / Detroit Free Press
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