Why Gas Prices Just Keep Going Up

Rachel Abrams opens the episode by introducing Cam Judy, a gas station owner in Florida who is confused about the sudden surge in gas prices. Judy recounts how he checked gas prices on a Wednesday afternoon, and everything seemed normal, with regular gas at $3.99 a gallon. The next day, his beer distributor informed him that all other gas stations in the area had jumped to $4.19 a gallon overnight. Judy was shocked, as it was a 20-cent increase in price overnight. He confirmed this by checking other gas stations, all of which were selling regular gas for $4.19 a gallon. He realized he had no choice but to raise his prices as well. Customers were equally bewildered, constantly asking, "What's going on with these gas prices?"

Judy notes that when the New York Times team last visited him, the conflict in the Middle East had just started, and it was expected that gas prices would rise. However, the war and conflict haven't been discussed much lately, and people seem to have forgotten about it. He expresses his frustration, stating that he doesn't have an answer for why there was a 20-cent increase in a 24-hour period. As a regular citizen, he wants to know why, and he believes his customers would also like to know. Abrams then introduces Vivian Nereim, a colleague who will help answer Judy's question about what is driving rising oil prices.

The Expanding Iran War and its Ripple Effects

Nereim explains that she is reporting from Riyadh, Saudi Arabia. She clarifies that Saudi Arabia has long been the world's largest exporter of oil, making it a key player in influencing oil prices. Up until recently, Saudi Arabia had largely remained on the sidelines of the Iran war. While it experienced some attacks, it wasn't hit as hard as other Gulf states like the United Arab Emirates, Qatar, and Kuwait. Nereim admits that many, including herself, wondered why Iran was targeting other states while easing up on Saudi Arabia. However, in the past few weeks, this has changed.

Nereim reveals that Iran was holding a "card" and waiting to play it. This card was Saudi Arabia's unique workaround during the Iran war. Due to its geography and history, Saudi Arabia had built a gigantic oil pipeline that stretches across the kingdom, allowing them to export oil from another exit point, the Red Sea, even when the Strait of Hormuz was choked off. This workaround gave Saudi Arabia a significant advantage over other Gulf states, whose oil supply to global markets was much less affected. However, this changed when Iran's ally in Yemen, the Houthis, began focusing its attention on that route, effectively seeking to cut it off.