The average price of diesel fuel in the US has increased again to more than $5 a gallon. The average gas price is almost $4. A year ago the average price for a gallon of diesel was $3.72. The renewed diplomatic uncertainty and new US and Iranian airstrikes are driving prices higher both at the pump and on the international wholesale markets.

The US military fired missiles into a commercial tanker trying to reach Iran. The tanker was disabled and is no longer proceeding towards Kharg Island. Two other commercial vessels complied with instructions and were redirected during the first 24 hours after Washington reinstated its blockade of Iranian ports. The renewed escalation between the US and Iran is also scrambling tanker deployment.

The West Asia war caused a bigger oil disruption than the Gulf War, 1973 oil shock. It could take 2-3 months before a significant share of oil flows can resume following a full reopening of the Strait of Hormuz. The global economy remains vulnerable due to dependence on a single chokepoint. Diversifying energy sources and supply routes is essential.