Crude oil prices have soared to a six-week high due to tensions in the Middle East, but energy industry expert Andrew Lipow predicts that gasoline prices in most parts of the United States may soon decrease, with a potential drop of about 20 cents per gallon.
Lipow, the president of Lipow Oil Associates based in Houston, stated in an interview with the New York Post on Monday (September 7) that as refineries transition from summer blends to lower-cost winter gasoline blends, retail gasoline prices in most regions of the United States are expected to experience a wave of decline in the coming period, with an estimated reduction of approximately 20 cents per gallon.
He pointed out that as long as crude oil prices do not surge significantly and conflicts in the Middle East do not escalate further, gasoline prices are expected to start falling from October.
Lipow’s forecast comes against the backdrop of rising crude oil prices. According to market data, Brent crude rose 1.5% on Monday to $97.73 per barrel, briefly touching $97.93, the highest since July 23; while U.S. West Texas Intermediate (WTI) crude also rose 1.8% to $93.10 per barrel, hitting a new high since late July.
The increase in oil prices is related to the military conflict that erupted between the US and Iran last weekend (September 5). The US Central Command (CENTCOM) stated that the Iranian Revolutionary Guard launched ballistic missiles at two US warships that day, with no US casualties. Subsequently, the US military took action against three Iranian oil tankers, with two damaged and one destroyed. CENTCOM also stated that these oil tankers were linked to a network supporting the Iranian Revolutionary Guard and its regional proxies.
In addition, the Financial Times reported on Monday, citing two sources, that Saudi Aramco’s refining facility in Jizan, with a production capacity of 400,000 barrels per day, was reportedly attacked again. As of the deadline, Saudi Aramco had not confirmed the extent of the damage, and the responsibility for the incident had not been determined.
Lipow also cautioned that the diesel market situation is more severe. He pointed out that with the agricultural harvest season approaching and the upcoming peak winter household fuel demand in the Northeast, diesel demand may rise. The diesel inventories in New England and the Southeast have dropped to the lowest levels since the US Energy Department began tracking in November 1990.
Lipow attributed the tight diesel supply to damaged refining facilities in the Middle East (estimated to take months to repair) and recent drone attacks on Russian refineries in Ukraine. He estimated that these actions have affected 40% to 60% of Russia’s refining capacity. These figures are Lipow’s personal estimates and not official statistics.
Lipow also stated that although the US has previously tapped into its strategic petroleum reserves and depleted commercial inventories, coupled with weakened demand in Asia, which temporarily alleviated market pressures, inventories are ultimately limited. If the diesel supply on the East Coast is once again disrupted, the situation could worsen.