17/ The current shortage, HFI says, will cause inventories of crude oil to be depleted at an unprecedented rate and cause the market to enter an "irreversible extreme state." Citi warns that global inventories would hit their lowest levels in 25 years of recorded data.

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16/ The world is now short of 5 million barrels per day. According to HFI Research, this can only be met by significantly reducing demand to levels last seen during the COVID-19 lockdowns; a scenario that imples major global economic disruption.

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15/ On that occasion, the impact of the financial crisis – which was not caused by an oil shortage – rapidly sent gas prices falling again. In the current crisis, there is an actual shortage of oil which will take a considerable amount of time to resolve.

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14/ Oil has only once before reached $130 per barrel – during a brief spike in July 2008, when it rose to $147.27 during a commodity boom, before collapsing to only $32 when the global financial crisis hit. US gas prices likewise rose briefly to an average of $4.11 per gallon.

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13/ Gasoline at an average price of around $5.50 per gallon will be the most expensive it has ever been in the US in nominal terms. It last reached a record of $3.97 in 2022 following Russia's invasion of Ukraine. Since 2000, it has nearly tripled in nominal term prices.

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12/ As a rough rule of thumb, every $10 move in crude oil translates to roughly $0.25/gallon at the pump, which is consistent with this estimate.

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11/ California for instance adds about $0.70 in tax per gallon, versus $0.25 in some Southern states). Blend requirements will also push up the price – 1 June is when the more expensive summer blend comes on sale in the US.

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10/ The $3.10 price of crude oil is thus only about 57% of the final price of a gallon of gasoline. $3.10 plus 57% gives an average national price of about $5.40–$5.60 per gallon nationally. Local prices will vary considerably, and will be much more expensive in some places.

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9/ Crude oil: ~55–60% of the price Refining: ~15–20% Distribution & marketing: ~10% Federal + state taxes: ~15–20% (federal excise tax is $0.184/gallon; state taxes average ~$0.31/gallon, though they vary widely)

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8/ At $130 per barrel of Brent crude, the implied average cost in the US for gasoline is about $5.40-$5.60. One barrel of crude oil contains 42 gallons per barrel, so at $130 per barrel, each gallon costs $3.10. The retail price of gasoline in the US is generally composed of:

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