As the war against Iran spreads across the Middle East and oil prices go above US$100 a barrel, Americans are seeing the price at the pump climb.

Last month Americans were paying $2.98 a gallon; today they have to fork out $4.02 a gallon, the highest price in four years.

Diesel is now at $5.40 a gallon.

The conflict is now in its thirty-second day, and the Strait of Hormuz, which sees 20 per cent of the world’s oil supply go through, is now seeing a heavily reduced volume of ship traffic. 

Iran has said that it will not surrender and says it is prepared for the U.S. to send in troops.  It says it has an army of one million ready to fight to the death. It is a country the size of the entire Western Europe with a population of 93 million. 

U.S. President Donald Trump has called on western allies to join the war and help ships go through the Strait of Hormuz, but they are reluctant to do so and see little justification for the escalation in military strikes.

Today Brent Crude is trading between US$112 to US$116 per barrel while West Texas Intermediate is between US$102-US$105.

President Trump says he expected oil prices to go up higher and that this spike is just temporary and will abate sharply very soon.

With attacks taking place on Iran’s South Pars natural gas field, the regime says it will carry out retaliation on energy installations of countries accommodating to the United States in the region. Already, Dubai’s tourism product has been dealt a hammer blow by this war. 

As March closes out, the month saw the highest surge in monthly prices in history.

President Trump has said he wants to take the oil in Iran, just like he did in Venezuela and will send troops to Kharg Island, where Iran’s largest oil storage facility is located. 

“If the Strait of Hormuz remains closed for another month with no signs of a pending resolution, the price of Brent crude will move toward $190,” said John Maisie, President of Stratas  Advisors.

“Of all the possible Middle East scenarios, the current state of play is one of the worst for the global economy. We expect the situation to escalate before it de-escalates.

“Iran’s leading military capabilities have been significantly degraded. However, what is unknown is their intent and capability to block the Strait of Hormuz that would sharply push up oil and gas prices,” observed Head of Global Economics at the Commonwealth Bank of Australia, Joseph Capurson.