After a month-long hiatus, gasoline prices in the United States have returned to $4! The escalation of conflict in the Middle East is feared to reignite inflationary pressures.

As the Middle East conflict continues to escalate, gasoline prices at U.S. gas stations have risen again to over $4 per gallon, sparking concerns in the market that inflationary pressures may further intensify. According to daily gasoline price data released by the American Automobile Association (AAA), the average price of regular unleaded gasoline in the U.S. reached $4.003 per gallon, breaking through this level for the first time after being below the $4 mark for a month. Despite a significant drop in crude oil prices in June, which at one point pushed gasoline prices down to $3.79 per gallon, they have since rebounded at the beginning of July and remained at high levels. This is mainly due to a substantial decrease in Russia's refining capacity, low imports from the U.S., and tight gasoline inventories. Meanwhile, fuel demand remains relatively strong during the peak summer driving season. Now, with the U.S. and Iran continuing to attack each other, the risk of ongoing disruptions in the Strait of Hormuz, a key global energy transport route, is increasing. This has driven crude oil prices to their largest weekly increase since April last week. Typically, crude oil costs make up more than half of the final gasoline price. It is reported that the U.S. Central Command has announced on social media that on the evening of July 19th at 7 p.m. Eastern Time, the U.S. military began its ninth consecutive night of attacks on Iran to "continue to weaken Iran's military capabilities to attack merchant ships and civilian sailors through the Strait of Hormuz." In response to the U.S. attacks, Iran has continued to strike multiple U.S. military bases in the Middle East in recent days. In addition, according to Iranian sources on the 19th, navigation through the Strait of Hormuz has dropped to zero, and as long as the U.S. continues its provocative actions, the strait will remain closed. Currently, no ships are passing through the Strait of Hormuz, and any attempts to do so will be met with Iranian strikes. Analysts point out that the ongoing mutual attacks between the U.S. and Iran have gradually evolved into a long-term struggle for control over the Strait of Hormuz. In the past few days, the common feature of the locations targeted by the U.S. military has been their proximity to the Strait of Hormuz, playing crucial roles in Iran's maritime traffic, energy exports, and military deployments. The U.S. is attempting to weaken Iran's military and logistical capabilities around the strait by targeting these maritime nodes. Iran's response has been to expand its attacks to U.S. military presence in the Gulf region, while also strengthening its actual control over the Strait of Hormuz. Iranian Deputy Foreign Minister Abbas Araghchi recently stated that in a state of war, Iran has full control over the Strait of Hormuz. Iran will not allow this important waterway to be used for actions that threaten national security. What is even more significant is that within Iran, there is a push to further "legalize" the management of the Strait of Hormuz, with a bill on long-term management of the strait submitted to the Iranian parliament. This indicates that some political forces in Iran hope to elevate control over the strait from military and policy tools to a national legal framework through legislation. For Iran, the Strait of Hormuz is no longer just a maritime issue, but has become the most crucial strategic bargaining chip in the current U.S. game. Next, the ongoing confrontation between the U.S. and Iran over the Strait of Hormuz may become normalized and continue. In the short term, there are no signs of either side making significant concessions. Against this backdrop, maritime traffic through the Strait of Hormuz has once again come to a standstill. With recent record high U.S. refined oil exports and domestic gasoline inventories 6% below the five-year average, the closure of the Strait of Hormuz will directly reduce global supply, leading to an increase in international oil prices and subsequently raising gasoline prices in the U.S. Gasoline prices are one of the most direct indicators of inflation perception for the American people. Although overall prices are still below the historical peak of over $5 per gallon after the 2022 Russia-Ukraine conflict, the rapid increase in U.S. gasoline prices is enough to raise market concerns. The rapid rise in gasoline prices not only undermines Trump's core political commitment to suppressing inflation but also casts a shadow over his economic agenda as the midterm elections approach. Analysts say that the continued rise in oil prices may have a negative impact on the Republican Party in the midterm elections in November, when the two parties will compete for control of Congress. Voters have already expressed dissatisfaction with high living costs and Trump's economic governance. According to research by Ryan Kamins and Neil Mahoney of the Stanford Institute for Economic Policy Research, even after considering other economic impacts, a $1 increase in gasoline prices leads to a 4.5-point or more decrease in the University of Michigan's consumer confidence index. Kamins, who served as an economist on the Economic Advisory Council for the Biden administration (focusing on gasoline policies from 2021 to 2023), says, "This roughly means that for every $1 increase in gasoline prices, people's perception of the economy will deteriorate by 5%." While energy prices have fallen, easing price pressures in the U.S. in June compared to expectations, the rising fuel costs now may complicate the outlook for inflation in the U.S. Energy industry experts point out that while June's U.S. inflation data reflected easing price pressures mainly due to declining energy costs, the continued rise in gasoline prices in July may quickly change this situation, impacting far beyond fuel itself - rising gasoline prices will increase transportation costs, freight rates, and broader logistics expenses, ultimately leading to price increases in commodities and services throughout the economy. Moody's chief economist Mark Zandi stated that if the situation in the Middle East escalates and the Strait of Hormuz remains largely closed for several weeks, global oil inventories are expected to further decline. In this scenario, prices of oil, gasoline, and other energy sources will sharply rise, leading to a shortage in physical supply globally.