00:05A striking fuel price divide is emerging as the war with Iran continues to send shockwaves through global energy markets.
00:13In Israel, the government is moving to cut gasoline prices after fuel costs surged to an all-time high.
00:20In the United States, meanwhile, drivers are confronting record-breaking gasoline prices,
00:25just as millions hit the roads for the Labor Day weekend.
00:29Israel's finance minister, Bezalel Smotrich, signed an order Sunday, cutting the country's fuel excise tax for the next two months.
00:37The move comes after gasoline prices jumped on September 1 to $8.25 shekels a liter, equivalent to around $2
00:46.74.
00:48And now the government is stepping in to reduce the pressure on consumers.
00:52Smotrich ordered a reduction of half a shekel per liter in the fuel tax.
00:56That will bring the price down to $7.75 shekels per liter starting Monday night.
01:02The reduction comes as Israel attempts to shield consumers from the impact of soaring global energy costs.
01:08Nearly 44 percent of the price of gasoline in Israel comes from the country's fuel excise tax.
01:14Another 15 percent comes from value-added taxes.
01:18And roughly one-third reflects the global price of crude oil.
01:22And those markets have been under intense pressure since renewed military action involving the United States and Iran raised fears
01:30over the security of crude supplies.
01:32But the situation facing American drivers is even more politically explosive.
01:38Gasoline prices in the United States have climbed sharply alongside crude.
01:43That is nearly $1 higher than the average price at the same time last year.
01:47For American households, $4 a gallon has become a major psychological and economic threshold.
01:54Fuel is one of the most visible prices consumers encounter.
01:58And when gasoline rises, Americans quickly feel the pressure through commuting, travel, deliveries, and the cost of everyday goods.
02:06The timing could hardly be worse for President Donald Trump and his Republican Party.
02:11The midterm congressional campaign is getting underway.
02:14And gasoline prices can rapidly shape how voters judge the economy.
02:19Trump campaigned on lowering energy costs.
02:22But the Iran war has complicated that promise.
02:25Crude prices have surged as military action between Washington and Iran has revived fears over disruptions to global oil supplies.
02:33Prices recently moved back above $90 a barrel.
02:37Trump has responded by criticizing refiners and fuel retailers, accusing them of profiting from elevated pump prices.
02:45That creates a difficult political equation for the White House.
02:48Trump wants lower energy costs for American consumers.
02:52But the military confrontation with Iran is putting upward pressure on the global oil market.
02:57And the effects can spread rapidly.
02:59Higher crude prices mean higher costs for refiners.
03:03Higher refining costs can push gasoline prices upward.
03:07And those increases can quickly show up in household budgets.
03:10And it highlights the enormous political pressure governments face when energy prices surge.
03:16There is also a broader economic backdrop.
03:19The Bank of Israel recently cut its benchmark interest rate by 25 basis points for the third consecutive decision.
03:27The central bank cited low and stable inflation.
03:30Deputy Governor Andrew Abir has said further reductions could be possible if price pressures remain stable and depending on how
03:38the economy responds.
03:39But a prolonged energy shock could complicate that outlook.
03:43Higher fuel costs can feed into transportation and consumer prices.
03:47That could make it harder for central banks to keep easing monetary policy.
03:52In the United States, the stakes are even larger.
03:55Gasoline prices are not simply another economic statistic.
03:59They are seen by voters every time they fill a tank.
04:02Two countries are now confronting the same global oil shock, but taking very different approaches.
04:09Israel is cutting its fuel tax to reduce the immediate burden on motorists.
04:13America's drivers, meanwhile, are facing gasoline prices at or near historic highs.
04:19And the underlying problem remains the same.
04:22The war involving Iran has rattled global energy markets and raised fears over the security of crude supplies.
04:28The war involving Iran has rattled global energy markets and increased oil prices.
04:29The war of the oil.
04:32The war of the oil.
04:39The war of the oil.
04:41The war of the oil.
04:44The war of the oil.
04:45The war of the oil.
04:46The war of the oil.
04:46The war of the oil.
04:46The war of the oil.
04:46The war of the oil.
04:47The war of the oil.
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