War in Iran hiking Quoddy gas prices

Passamaquoddy Bay might seem like a long way from the Persian Gulf. However, the war unleashed when the United States and Israel launched coordinated attacks on Iranian targets on February 28 really does make life more expensive for people trying to make ends meet in Washington and Charlotte counties, particularly with the sudden spike in gasoline prices, which surged up about 50 cents a gallon in just one week.

Just ask Katie Orr, pumping gas into her car at the Irving Oil station in St. Stephen. The price for regular gasoline on March 9 was $1.519C a litre, the same as at the Red Rooster, about 16 cents a litre more than in late February. What does she think of it? "It's not great," she replies, adding, "I usually only throw in 20 bucks at a time until I can get over to Calais."

On the same day in Calais across the St. Croix River, Canadians headed home could buy regular gasoline for $1.269C a litre -- or $3.51US a gallon for people paying with American money  at Hardwicke's Country Store on Main Street near the Ferry Point bridge. The price was $3.49 a gallon at the Irving station on North Street. Elsewhere in Washington County, regular gasoline sold for $3.59 a gallon at both the Strawberry Patch General Store in Perry and the Shell station in Whiting.

The average price in Washington County, at $3.468 according to the American Automobile Association, was a bit higher than the Maine state average of $3.411, but a penny lower than the United States national average of $3.478. The state average was up from $3.379 the previous day, $2.918 from one week previous, $2.905 from a month previous, and $3.066 from a year before. The numbers are still below the state's highest average of $5.094 on June 16, 2022, but the hikes since the war began have apparently reversed the trend of dropping prices over the past year.

At $1.519, regular self‑serve gasoline was selling in St. Stephen for nearly a nickel a litre less than the maximum of $1.562, including harmonized sales tax set by the New Brunswick Energy and Utilities Board, using a formula under the Petroleum Products Pricing Act. Prices in St. Stephen were a bit lower than the national average of $1.54 a litre, according to the Canadian Automobile Association.

According to GasBuddy's survey of 1,228 stations, prices in Maine were 52.8 cents a gallon higher than the same date in February and stand 35.2 cents a gallon higher than a year ago.

"In just a week, consumers have seen gasoline prices surge at one of the fastest rates in years after oil prices spiked following U.S. strikes on Iran and the effective closure of the Strait of Hormuz," Patrick De Haan, head of petroleum analysis at GasBuddy, says in a news release.

"With additional attacks across the Middle East over the weekend pushing oil above $100 per barrel for the first time in years, fuel markets are now rapidly recalibrating to the risk of prolonged disruption to global supply flows. As a result, gasoline prices in many states could climb another 20 to 50 cents per gallon this week, with price‑cycling markets potentially seeing increases as early as today [March 9]. Diesel may rise even more sharply, with increases of 35 to 75 cents per gallon possible as global distillate markets react. While the situation remains highly fluid, consumers are already beginning to feel the impact as energy markets adjust to this sudden escalation."

Iran has blocked the Strait of Hormuz, through which about 20% of the world's oil supplies move each year. Oil prices dropped below $100 a barrel on March 9 after President Donald Trump threatened to use military force to keep the strait open. Others question how soon the war will end and normal shipping traffic resume. ExxonMobil's chief economist Tyler Goodspeed predicts in an interview with CNBC that the Strait of Hormuz is more likely to remain closed longer than current expectations.

If so, prices at the pumps on both sides of the St. Croix River could reach upwards for a while yet.