National average pump price tops $4 as crude hits $100; AAA says gas up 15 cents in a week

Gasoline jumped 15 cents in a week and the national average is now above $4 a gallon, AAA says, after crude topped $100 for the first time in this run. Brent traded at $100.30 and WTI at $91.70 on Friday, both up hard on the week. For jobbers and c-store operators, that means rack prices climbing faster than most of you can reprice the canopy, and street margins getting squeezed on the way up.

The cause is supply, not demand. The Strait of Hormuz is almost entirely paralyzed, the Houthis are targeting tankers in the Bab el-Mandeb in the Red Sea, and Kazakhstan has suspended flows through the Caspian Pipeline Consortium after Ukrainian drone attacks. Three separate chokepoints hitting at once is what pushed Brent through triple digits.

For your operations this week, the mechanics are simple. Replacement cost is running ahead of what's in your tanks, so every load you take costs more than the last. Hold your street price too long and you sell your inventory below replacement. Move it too fast and you lose gallons to the station down the road. Diesel is the tighter worry. The UK press is already warning of 180p diesel, and Cathay Pacific is raising fuel surcharges from August 1, both signs of how far distillate has run.

OPEC+ output

The one piece of supply news pointing the other way comes August 2, when eight OPEC+ producers meet. The producers named are Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman. Reuters reports they are expected to raise their combined September target by another 188,000 barrels a day, matching the increase set for each month since June.

The catch is that the quota increases exist largely on paper. Members can't pump much of what they've already been cleared to produce, so the September bump may do little to actually put barrels on the water. Crude could ease if the strait reopens and OPEC+ barrels show up, but the paper-versus-real gap means the meeting alone is unlikely to break the run.

Russian sanctions

The EU's 21st sanctions package landed on Georgia's Kulevi oil terminal and refinery for processing Russian crude, and Tbilisi's foreign ministry has publicly objected. Meanwhile Chinese refiners bought up every August Kozmino cargo of Russia's ESPO blend weeks earlier than usual, tightening the discount on that grade to about $1 a barrel.

Neither moves your rack directly. Both matter because they show Russian barrels getting rerouted rather than removed, which keeps the global balance tighter than the headline OPEC+ number suggests. Less Russian crude reaching open markets means less cushion if a chokepoint stays shut.

What to watch

The Strait of Hormuz is the whole ballgame for near-term price direction. If it reopens, crude could soften quickly and rack prices with it. If the Houthi attacks and the Hormuz paralysis hold, distillate stays tight and diesel could keep climbing.

Watch the August 2 OPEC+ decision and, more important, whether any of that target increase turns into real barrels. Watch your local gas tax calendar too. Reprice your inventory to replacement cost, not to what you paid, and keep a close eye on diesel spreads heading into next week.