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?
All of the answers around “what people are willing to pay” and “refinery mechanics” are ignoring the massively increased profits that oil companies have enjoyed in Q1 2026.
It’s gouging. They don’t have to charge customers more, or shortchange labor, they just do. Because they can, with impunity.