00:00The national average for a gallon of gas is higher than four dollars. This is the highest in nearly four
00:08years, higher than any point during the president's two terms. West Texas crude oil prices, the U.S. benchmark, they
00:15settle at their highest point in four years. And you can see they're actually up from what they closed at
00:20last night, which I said was was pretty high already. Let's get a CNN senior reporter Matt Egan, who is
00:26here with us in this four dollars a gallon. I mean, this is
00:29a benchmark, a pretty big psychological barrier. Yeah, a huge psychological barrier. And one, John, that was unthinkable when the
00:37year started, right? Four dollar a gallon gas in March. But here we are. So the new national average 402
00:43that is well above the 298 a gallon before the war started significantly higher than 317 at this point last
00:51year. An analyst warned that the national average could approach or even take out the all time high of five
00:59dollars a
00:59gallon that was set four years ago after Russia invaded Ukraine. And look, drivers in some parts of the country,
01:05they're already facing significantly higher prices, right? 420 a gallon or higher in Illinois, Utah, Arizona, above five dollars in
01:14Washington state, approaching six dollars in California. Now, obviously, this is all about the fact that the war has set
01:22off this epic supply disruption, right? Bigger than after Russia invaded Ukraine, bigger than the first Gulf War, the second
01:27Gulf War.
01:28That's why oil prices have skyrocketed. As you mentioned, U.S. crude topping $100 a barrel, settling above that level
01:34for the first time in four years yesterday and trading above there today as well. The problem is that the
01:41market just cannot function if the Strait of Hormuz remains shut down. And overnight, we had another fully loaded oil
01:49tanker off the coast of Dubai that was struck by what Kuwaiti officials have blamed
01:53on an Iranian drone attack. And the investment bank McQuarrie out of Australia. They're warning that if this war continues
02:00and it lasts through June and the Strait of Hormuz remains shut, you could see far higher prices. Oil could
02:07hit two hundred dollars a barrel. John, that does not equate to five dollars a gallon gas or six, but
02:13something like seven dollars a gallon gas. Now, I know two hundred dollars oil. That sounds kind of crazy. But
02:18some of the oil analysts that I'm in touch with, they're not dismissing
02:21this, right? A veteran analyst Bob McNally, he told me that high one hundreds or even, yes, two hundred dollars
02:27is possible if this crisis continues to drag on. And McNally, you know, he said the market has just stopped
02:33listening to Trump. He said they're not buying it anymore. Earlier in this crisis, the market kind of believed the
02:39president's comments around a quick ending to this war. But now there's a lot more skepticism, John. And so look,
02:45I think the bottom line is the Strait of Hormuz, right? If it can reopen, then you could see oil
02:49prices crash back to earth.
02:51But if not, then this pain at the pump could get worse before it gets better. And look, we'll see
02:56how they react to the news from the president that he's considering or hinting at the fact that the United
03:00States may end its efforts there without reopening the Strait of Hormuz.
03:05With us now, CNN senior business reporter David Goldman. Great to see you. It's good to see you. So gas,
03:09four dollars, two cents a gallon. And what strikes me is that a month ago was a dollar less. That's
03:14a big jump.
03:14Yeah. And, you know, every dollar that gas prices rise, that's about a thousand dollars for American families over the
03:21course of a year. So this is a lot of pain for people. And it's not just at the pump.
03:26Remember, diesel prices are also rising. They're above five.
03:30So now we're talking about everything that's on a truck gets more expensive. There's a lot of added cost here.
03:36And it doesn't look like it's going to stop anytime soon because President Trump today is talking about how the
03:43Strait of Hormuz might remain closed for some time.
03:46Now we're talking about maybe one hundred fifty dollar oil, two hundred dollar oil, some analysts are saying yesterday. And
03:53that's a real possibility that translates to maybe five, six dollar gas. That's a lot, a lot of pain for
04:01people.
04:01And these oil traders, I think, are faced with these conflicting signals all the time. Right. Yesterday, the president put
04:06out his tweets saying negotiations are going well. We're talking to a much different Iranian regime than last night. And
04:12I happen to be here working.
04:13There's a giant Kuwaiti tanker on fire there. And so you have these conflicting forces.
04:18Well, that's right. And, you know, if you look at the oil market, they're telling us a signal, right?
04:23They're giving us a sense of what to expect from this war right now. Brent crew, that's the international benchmark
04:30that's trading at about one hundred and ten dollars a barrel.
04:34If you go out, though, because you can buy futures for next month and the following month and the following
04:41month.
04:41And those are falling off pretty quickly. That gives us a sense that, well, OK, oil might start to fall
04:47a little bit, but we don't get back down to seventy dollars a barrel,
04:52which is where we were before this conflict started until twenty thirty two. Oh, wow.
04:57So this means that for six years, the oil market is saying that we're going to be above where we
05:03were before the conflict started.
05:04And that's a bad signal for the economy. It means that we could have high gas prices, high oil prices
05:11for quite some time.
05:12Yeah. Audios to three dollars a gallon for gasoline, maybe years before we get that.
05:16That's right. David Goldman, great to see you this morning. Thank you very much.
05:19The Wall Street Journal reports this morning that President Trump is considering ending the war without reopening the Strait of
05:27Hormuz.
05:27And just moments ago, President Trump put out a statement on social media that doesn't exactly contradict that report.
05:34The president wrote all of those countries that can't get jet fuel because of the Strait of Hormuz, like the
05:38United Kingdom,
05:39which refused to get involved in the decapitation of Iran.
05:42I have a suggestion for you. Number one, buy from the U.S.
05:45We have plenty. And number two, build up some delayed courage.
05:49Go to the Strait and just take it.
05:51You'll have to start learning how to fight for yourselves.
05:54The U.S. won't be there to help you anymore, just like you weren't there for us.
05:59Iran has been essentially decimated. The hard part is done.
06:02Go get your own oil. And then it's signed President D.J.T.
06:06All right. Let's get right to CNN Senior National Chief National Security Analyst Jim Shudo, who's in Tel Aviv this
06:13morning.
06:13Jim, it's a pretty remarkable statement from the president, which almost seems to confirm that he's considering leaving the Strait
06:20of Hormuz to somebody else.
06:22Well, John, you see a great shifting of the responsibility there, right?
06:26To solve a problem that didn't exist before the war, that is, the closure of the Strait of Hormuz.
06:31President Trump, after raising the possibility of forcing it open, threatening Iran in various ways, positioning forces in this region
06:40to take it by force,
06:43as well as Iran's oil facilities on Karg Island, he is now saying, in so many words, not our problem.
06:51Now, the president could change his mind again.
06:53He's changed his mind multiple times in his public statements since the start of this war.
06:57But it at least appears to be laying the rhetorical groundwork to end the war, declare victory perhaps, but without
07:07solving that key problem,
07:08which is now causing major, major global economic implications, including for America's allies, particularly those in Asia that depend on
07:18oil from here.
07:19Let's talk about the price of gas specifically, if we could.
07:21So, as I just noted, the average price for a gallon of gas here in the U.S., now above
07:25$4 a gallon.
07:27This is having such an important ripple effect across the global economy.
07:32Jet fuel certainly getting a lot of attention, Eleni.
07:35Yes, absolutely.
07:36So, what this war has exposed is the Achilles heel of the global economy, Erica, no doubt.
07:43This war isn't just contained to the Gulf region, but it actually has a chain reaction around the world.
07:48When I see gas prices in the United States hitting over $4 a gallon, this is the highest level since
07:552022, when Russia invaded Ukraine.
07:57Markets are interconnected.
07:58You know, President Trump keeps talking about the United States being energy independent.
08:02But because everything is so connected, people in America are feeling it at the gas pump.
08:07And, in fact, we've seen ripple effects around the world economy.
08:10Jet fuel price is really fascinating.
08:11I was looking at what they've been doing over the past month.
08:14They've doubled.
08:15They're up 104%.
08:17If you break that down further into Asia and Oceania, you've got jet fuel prices, so refined jet fuel, up
08:23134%.
08:24In North America, jet fuel prices are up 88%.
08:28So, we're talking about a massive impact here.
08:31So, the overall closure of the Strait of Hormuz is not just about 20 million barrels of oil passing through,
08:36but it's also those refined crude products that includes jet fuel, Erica.
08:42Eleni, really appreciate the reporting.
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