The factoid thrown around is that roughly 20% of the world’s oil supply travels through the Strait of Hormuz. Since it closed, my local gas prices in one area of the US midwest have gone from $2.60 to now $4.10 presumably as reserves have been used up.
I could understand a 20~30% increase in price to correlate with the reduction in supply, but what are the economic factors that lead to what feels like such a disproportionate increase?
Diesel seems to have gone up slightly more. Diesel tends to be somewhat less elastic - people are using this for work they consider important. You might not make a long distance trip (stay home, or travel to something closer to home), but you won’t stop buying things shipped with diesel. In some cases you are substituting a trip to the store (gas) for deliver (diesel, but because it is a combined trip overall less fuel used)