Gas prices are climbing thanks to heat and geopolitics

Gasoline prices have skyrocketed in the past two days, reaching an average of $3.78 per gallon nationwide—over 25 cents higher than a month ago.

Gasoline reached a three-month high on Wednesday when it increased by 5 cents from the previous day, the largest one-day increase since June 2022, per the American Automobile Association.

In addition
Just a day before, there was a 4-cent increase, marking the highest one-day spike in a year. Overall gas prices have spiked by 9 cents in a mere 48 hours.

Why?
The spike in prices is linked to supply cuts implemented by the OPEC nations and Russia. The impact of extreme heat has also added to the problem as it affects refineries.

Extreme heat waves
Soaring temperatures have prevented refineries from operating at full capacity.

Oil refineries, designed to function between 32 and 95 degrees Fahrenheit, have scaled back their operations for safety, causing a supply constraint.

Four fuel-making plants in Texas and Louisiana experienced outages due to scorching temperatures this summer.

OPEC and Russia
The global supply of crude oil has faced production cuts from major producers, including Saudi Arabia, Russia, and other OPEC+ alliances. These cutbacks have further influenced the rise in gasoline prices.

Yesterday, Saudi Arabia said it would extend its production cuts through September, a move that angered the White House as it will add to inflation.

Furthermore
With the hurricane season approaching, the situation is precarious, as even minor refinery disruptions can cause significant supply delays. A major hurricane hitting the U.S. Gulf Coast could push gas prices to $4 or even $4.25 per gallon.