JPMorgan Predicts US Fuel Prices at Risk of Breaking Through Rp87,000 per Gallon
Fuel prices in the United States (US) are predicted to soon breach the psychological threshold of US$5, or approximately Rp87,000 per gallon. Analysts from banking giant JPMorgan warn that the escalation of conflict with Iran continues to pressure global energy markets and disrupt supplies of refined fuels.
The JPMorgan analysis team, led by Natasha Kaneva, states that disruptions related to the conflict in the Middle East are no longer limited to crude oil markets but have spilled over to supplies of finished fuels, particularly petrol and jet fuel (avtur).
According to a New York Post report, oil refineries are currently prioritising jet fuel production due to surging global demand and supply disruptions linked to the Strait of Hormuz crisis and damage to energy facilities in the Middle East.
However, this production shift is having a detrimental impact on US drivers. “This explains why US petrol prices are currently at US$4.56 per gallon and why the risk of prices reaching US$5 can no longer be ignored,” the JPMorgan analysts wrote in a report cited by the Financial Times.
Technically, increased avtur production often reduces diesel output proportionally and tightens petrol supplies. As a result, US petrol production has reportedly dropped sharply compared to last year, just as Americans enter a busy summer driving season.
Based on national AAA data released on Monday (11/5), the average price of regular petrol in the US has reached US$4.52 per gallon. Meanwhile, premium petrol has exceeded an average of US$5.37, and diesel prices are much higher at US$5.64 per gallon.
A rise in fuel prices to US$5 levels carries serious implications for the US economy. The last time Americans experienced such high prices was during the 2022 summer inflation crisis.
Consumer sentiment has also reportedly deteriorated. The University of Michigan Consumer Sentiment Index recently fell to a record low, with respondents citing petrol prices and inflation as their primary financial concerns.
Analysts warn that price relief will not occur in the near term unless supply disruptions in the Middle East subside significantly and fuel markets stabilise.