The US Department of Energy assumes that the Strait of Hormuz remains closed until late May

The U.S. Department of Energy's statistical branch said on Tuesday that it assumes the Strait of Hormuz is effectively a?shutdown through late May - and traffic will begin?gradually next month. This led the agency to raise its forecasts of U.S. fuel prices. The stalemate in the Strait of Hormuz between Iran and the U.S., Israel, has impacted global energy markets. Millions of barrels of Middle Eastern oil exports are stranded every day. This is causing concern about fuel shortages all over the world. Prices for gasoline, diesel, and other fuels have risen to multi-year highs in the U.S. This is a serious political problem for President Donald Trump, just months before midterm elections.

U.S. Energy Information Administration expects that?U.S. Retail gasoline prices will?average $3.88 per gallon in this year. This is about 18 cents higher than the previous forecast made by the U.S. Energy Information Administration.

EIA stated that its forecast assumes the Strait of Hormuz to be closed until late May before beginning a gradual reopening?next week. The EIA stated that traffic through the Strait of Hormuz is unlikely to return to pre-conflict levels until later this year. Prior to the war, it accounted for a 'fifth of the global oil supply.

The EIA reported that in April, approximately 10.5 million barrels of crude oil per day were shut down from Iraq, Saudi?Arabia Kuwait, the UAE Qatar and Bahrain.

The EIA reported that global oil inventories will fall by an average of '8.5 million barrels per day (bpd) in the current'second quarter. This should keep Brent crude oil near $100 a barrel for May and June.

(source: Reuters)