The US EIA warns that fuel prices may continue to rise for several months following the reopening of Hormuz.

The U.S. Energy Information Administration said on Tuesday that fuel prices could continue to rise for months after the Strait of Hormuz is reopened, despite 'President Donald Trump’s 'assurances' that consumers would see immediate relief once he ended the war with Iran. Oil and fuel prices have soared around the globe as a result of the U.S./Israeli war against Iran. The conflict is now in its second week, and Iran has blocked vessels from crossing the Strait of Hormuz - a major trade chokepoint. Trump's approval rating dropped to new lows when pump prices surged up to multi-month levels. He has repeatedly told Americans the sticker shock is temporary.

The EIA's short-term outlook report was less confident. The agency said that the fuel price trajectory depends on several variables including the length of the Strait of Hormuz closure, and the amount of Middle East oil production which has been halted due to the closure.

We've never seen the Strait reopen before, just as we never saw it close. The EIA stated that it is still unclear what exactly this?looks' like. Trump has given Iran an ultimatum that they must open the Strait of Hormuz before the end of the day on Tuesday. Trump has threatened that "a whole civilisation will die tonight" if an agreement is not reached by Tuesday.

The EIA stated that it expected full restoration of flow through the Strait of Hormuz to take months, even after the conflict ends. It also said it expects future disruptions in supply to keep oil at levels above those before the conflict for the remainder of the year. Reporting by Shariq KHan in New York, editing by Chizu NOMIYA

(source: Reuters)