Why Gas Prices Just Keep Going Up

From the New York Times, I'm Rachel. Abrams and this is the Daily. About a month into the war with Iran, back when gas was at $3.99 a gallon, daily producer Anna Foley headed to. Florida to talk to a gas station owner. about how prices at the pump were. feeling both for him and his customers. I would love for this to be over next. week and I go back to 279 a gallon. That'd be awesome. I hope beyond hope.

that it is temporary and it does not. last long. But yeah, I I do worry about. the longevity of high prices. >> That was back in March. But recently, and somewhat unexpectedly, [music]. that gas station owner, Cam Judy, reached out to us again. >> Hello. >> Hey, Cam. >> Hey, Anna. How you doing? >> He had an update. So, a few days ago, you texted me. because of this kind of wild thing you.

were seeing happen at your pumps. So, I. just want to know what happened. Tell me. the story. >> Yeah. So, I checked the gas prices. I. believe it was Wednesday. I was working. until around 3:00 in the afternoon just. checking the prices and see what was. going on and everything seemed normal. I. was. >> Where were you checking them? >> I was checking them on Gas Buddy, the. the different gas stations, see what. everybody was priced at. I was sitting. at $3.99 a gallon for regular gas. >> And uh the next day. I opened the gas station and I was.

talking to my beer distributor. >> and he was like, "What's your gas at, Cam?" And I said, "I'm still at 3.99.". And he's like, "Wow, all all the other. gas stations I passed by on the way in. here all went to 419 this morning." And. I was like, "There's no way. There's no. way. It was 3.99 yesterday.". >> Wow. That's a a a 20 cent jump in price. overnight. That's pretty uh that's. pretty crazy. It's pretty shocking. And. I I didn't believe him until. [clears throat] I again I checked the. gas stations in and around me. And sure.

enough, every single one of them was at. $4.19 for regular gasoline. I said, "Wow, I I guess I really need to uh as. much as I don't want to, I got to go up. 20 cents a gallon.". >> Yeah. Did customers notice? And what did. they say to you? >> Oh, yeah. Oh, yeah. I mean, the the one. phrase out of every everybody's mouths. were just, "What's going on with these. gas prices?".

>> When you guys came down here last time, of course, the the conflict over in the. Middle East area had just started. It. was it was uh it was very prominent in. the news. Everybody was talking about. it, and it was kind of expected, I. think, back then. Okay, we got a we got. a war going on. There's conflict going. on. Yeah, we're going to see a big jump. in gas gas prices, but the war and the. conflict over there hasn't really been. talked much about lately. There's other. stuff going on in the news that people. are talking about. People kind of. forgot. And that's kind of the hardest.

part for me is I just. I don't have an answer. What. specifically caused a 20 cent increase. in a period of 24 hours? I just wish as. as just not even as a business owner, as. a regular average Joe citizen, I would. like to know [music] why. And I think a lot of my customers would. also like to know why. So [music] today on the show, we attempt. to answer Cam's question, what is.

driving [music] rising oil prices? I. speak with my colleague Vivian Nerim. about the expanding Iran war and why its. ripple effects are being felt at pumps. around the world. It's Thursday, September 17th. Vivian, welcome back to the show. Thanks. for having me. So, we here at the Daily. have been in touch with this gas station. owner in Florida who I am sure is not.

the only person who's sort of confused. by what he's seeing right now. He and. many of us understand that this strangle. hold on the straight of Hormuz has sent. gas prices soaring. Like we all get that. by this point in the war. But the US and. Iran have been in a stalemate for months. now. So we're turning to you to explain. to us what has happened on the ground. that can help explain this sudden surge. in prices. Yeah. So I'm talking to you. from Riyad, Saudi Arabia. And Saudi. Arabia has for a long time been the. world's largest exporter of oil. You.

know, if you want to move oil prices, you look to Saudi Arabia. And up until. this point, Saudi Arabia has largely. been on the sidelines of this war. Yes, it was getting attacked. Yes, things. were quite concerning. But at the same. time, it wasn't getting hit as hard as. some of the states east of the Persian. Gulf, like the United Arab Emirates, Qatar, Kuwait, Bahrain. You know, I and. a lot of other people were kind of. sitting here wondering why, to be. honest, why was Iran targeting all of.

these other states and kind of easing up. a bit on Saudi Arabia. >> In the past few weeks, all of that has. changed. >> Essentially, it's become very clear that. one of the reasons that this wasn't. happening, that the country wasn't being. attacked as heavily as the other Gulf. states, is that Iran was kind of holding. this card and waiting to play it. And. that that is what has happened now. essentially. Now they've decided to play. that card. And what is that card, Vivian? Just unspool that for us. So.

Saudi Arabia, it's just on the other. side of the Gulf from Iran. And they. managed to find a workaround during the. Iran war because of their geography, because of their history to get their. oil out from another exit point. Okay. So while the straight of Hormuz which is. on sort of the eastern side of Saudi. Arabia close to Iran was essentially. choked off, Saudi Arabia had built a. long time ago this gigantic oil pipeline. that stretches all the way across the. kingdom. And this had just been built as.

a sort of eventuality. Maybe someday. we'll need this. And it suddenly became. the moment for this oil pipeline. They. started pushing as much of their oil as. they could overland through this. pipeline to the Red Sea to get it out to. their global customers that way. So they. had this workound that none of the other. Gulf states had. And as a result, the. kingdom supply of oil to global markets. was much less affected than the other. countries. But all of that changed over. the past few weeks essentially as Iran's. ally uh in Yemen began focusing its.

attention on that route and essentially. seeking to cut off that route. Okay. So. fill in the specifics of what has. actually happened. >> Right. So the group that you really need. to understand here is the Houthis which. are an Iranian ally in Yemen. [music]. So the Houthies started out as this kind. of ragtag religious. movement in northern Yemen and they. became these increasingly important.

power players starting in 2014. [music] In the aftermath of this really. complicated failed sort of Arab Spring. transition in Yemen, the Houthies swept. into Sana, the capital of Yemen, and. they took it over. They essentially. routed the internationally recognized. government of Yemen, pushed them out of. the city, and then continued to actually. push them farther and farther south in. Yemen. That set off this really brutal and. grinding civil war in which Saudi Arabia.

intervened to pretty disastrous. consequences in 2015 [music]. >> to fight the Houthis. >> to fight the Houthis and to try to. restore the internationally recognized. government. So Saudi Arabia is Yemen's. northern neighbor. They have this long. poorest border with Yemen. And they were. essentially looking at the Houthis, this. militia that's backed by Iran, taking. over territory on their border and. getting quite nervous. So they began. this disastrous bombing campaign in. Yemen to try to back the government and.

to essentially push out the Houthis. So those two sides were fighting really. fiercely. It became this really kind of. fragmented, complicated civil war and. then it reached a sort of stalemate in. 2022 when a truce was signed. This was. backed by the United Nations and. fighting had largely quieted down since. then. >> But the Houthis were frustrated. They. really wanted to reach some form of. political agreement that would recognize.

their power in Yemen and that would give. them access to oil resources which they. do not have right now because of the. territory that they control. So they. were under political pressure to do. something and this was sort of the. backdrop in which the Iran war kind of. arrived in the region and and blew. everything up. >> Okay. In Iran, meanwhile, there had been. this faction that was gaining increasing. leverage that had been pressing to. escalate in in the war with the US. Right? The war has been dragging on for.

6 months. There's no clear end in sight. and this sort of group in Iran, group of. of officials, group of leaders, >> the hardliners, we talked about them on. the show before. Yeah. >> Yeah. Wanted to place sort of increasing. pressure on Trump via increasing. pressure on the global economy, global. energy markets. So, at the same time. that the Houthis have their own. interests that they're pursuing and are. feeling increasingly frustrated with the. political situation on the ground in. Yemen, their backers in Iran have an. interest to escalate. So there's a real. kind of collision of mutual interests.

between the Houthis and their allies and. backers in Iran. >> And how is that played out on the ground. exactly, Vivian? Just explain that to. us. >> So it's a complicated story and there's. been a couple of flash points where. things have really escalated between. Saudi Arabia and the Houthis over the. past few months, but one of the really. key ones was in July when the Houthis. declared a naval blockade on Saudi. Arabia and essentially said, "We're not. going to let any Saudi ships through the. Red Sea." And after this blockade is. launched, you see Saudi Arabia decide to. start pushing back, but they seem to be.

wary of actually entering a full-blown. war. So you see air strikes start. happening in Yemen. The Houthies say. Saudi Arabia is bombing Yemen. Saudi. Arabia says nothing. The Yemen. government claims that it's the ones. carrying out those bombings. And you. also see a real escalation in ground. fighting between the Houthis and Yemen. fighters who are backed by Saudi Arabia. So things start to heat up on the ground. in this kind of period after the. blockade. But for now, nobody seems to. want to escalate too much. And that all.

changes essentially when the Houthies. start pushing towards the Red Sea coast. last week. >> And a new wave of Houthi attacks on. Saudi Arabia. >> The Houthis taking islands in the Red. Sea, taking coastline along the Red Sea. >> The Houthis can now threaten almost any. shipping passing Yemen's Red Sea coast. So the Houthis start assailing these. parts of Yemeni territory that are. essentially the gateway to the Babel. Mandabub Strait, this very important. strait at the opening of the Red Sea.

And it's clear that they're pushing and. pushing. But for a time it seemed like. this was going to be a battle. It was. going to take a while. Saudi Arabia was. going to fight back. And then suddenly. all of that crumbled on Thursday and. Friday and government soldiers were. retreating incredibly rapidly. and the. Houthies essentially seized this vast. swath of territory along the Red Sea. that is Yemen's most strategic and. important real estate and ended up in. control of the Baband Strait.

>> and so and not just for important for. Yemen but as you said they basically. seized this workaround that Saudi Arabia. had that was helping it export its oil. since the start of the war. >> Yes. So the Houthis were able to launch. attacks in the Red Sea from the. territory that they previously had, but. this gives them much more direct control. over the strait. And then to make. matters so much worse, on Friday, the. same day that the Houthis have taken. over all of this territory that puts. them on this key straight, Saudi Arabia.

announces that the crucial crossland. pipeline that it has been relying upon. to export oil has been attacked and that. they have to shut it down. >> [music]. >> The east west pipeline is what goes. across Saudi Arabia. That was sort of. the workaround. Okay. If something. happens with the straits, we got this, you know, big wide pipeline. Well, now. it's been hit in multiple points. It's. [music] out. The two straits are. controlled by Iran and its militants. >> As of now, essentially, all of the exits. for oil from the Arabian Peninsula have. been severely choked off or just cut.

off. [music] And all of this has left Saudi. Arabia with basically no good options. for getting their oil to global markets. And we're already starting to see the. [music] impact of that around the world. [music]. We'll be right back.

Vivian, you just told us that Saudi. Arabia has no good options to get their. oil out of the country. So, what are. their bad options? So, the first thing. to remember is that this is an. existential problem for Saudi Arabia. The entire Saudi economy depends on oil. and prochemicals. Their government. budget depends on oil revenue. Their. payments to royal family members depend. on oil revenue. So the entire kind of. political and economic system of the. kingdom is still very much tied up in.

oil. They want that to change, but their. efforts to diversify away from oil and. to turn the kingdom into this tourism. and business destination also depend on. oil revenue because they need to make. these investments that are quite costly. So if they can't figure out a way to get. oil out to global markets, it's a really. serious problem for them. >> Okay. So what can they do? So their. options are one is to go back to war. with the Houthis and to try to force. them to back down militarily, which.

didn't go so well the first time. >> Yeah, it's a very unattractive course of. action for them for a lot of different. reasons. Another option that they could. take is to try to come to some sort of. diplomatic solution with the Houthis and. negotiate an agreement politically that. gets the Houthis to back down. That's. also unattractive because everything. that their history of negotiations with. the Houthies have shown is that this is. not a group that is ready to back down. easily. They have very maximalist. demands and those demands are only going.

to get bigger now that they feel in this. position of great power and that they. have the upper hand. >> So they're definitely considering that. option, but it's not ideal at all. either. And there's no guarantee that it. leads to a sustainable agreement. Right? the Houthies could decide in a year or. two years, actually we want more and. it's back to war for you unless you. agree to what we want. >> You know, one player we have not talked. about yet is the United States. And I. bring that up because the United States. is both Saudi Arabia's most powerful. ally and also the US obviously started.

this whole war with Iran in the first. place alongside Israel. So I wonder. where is the United States in this. moment? Are they helping Saudi Arabia in. this moment? >> Yeah. So because Saudi Arabia is so. reluctant to go back to war with the. Houthis on its own, it is very keen to. get support from the United States and. other international partners if it takes. that path. And we do know that. >> Crown Prince Muhammad bin Salman of. Saudi Arabia has approached the Trump. administration multiple times, including. as recently as last week to ask the.

United States to help, to ask the United. States to kind of join a fight against. the Houthis. >> And what did the US say? As far as we. know, President Trump declined. We do. not see any evidence on the ground of, you know, really stepped up US. involvement. There is, of course, some. intelligence sharing and other things. that were essentially already going on, but the US is not getting involved in. air strikes. The US seems to have the. mindset of let's just leave this to. Saudi Arabia to sort out. You know, I. can imagine that one reason why the US.

might be hesitant to get involved is. that the US is already really. overstretched because they are already. at war with Iran. But on the other hand, Saudi Arabia is a really important ally. and they are asking for help against a. militia that is backed by an enemy of. the United States. So why isn't the US. willing to step in? Yeah. So Trump has. given some statements suggesting that. the Houthis don't really want to fight. the US, that they just want to fight. Saudi Arabia. Um that's a little. complicated because Saudi Arabia's oil. getting out through the Babel Mundab has. implications for global energy markets.

and therefore for the United States. Sure. But according to sort of his. telling you, look, this is a group. We. already kind of fought them. There was a. US air strike campaign against the. Houthis last year that was brief and. ill- fated. >> Essentially, no one has found a military. solution to the Houthis. They've gone up. against these much wealthier, much more. powerful foes and those much wealthier, much more powerful foes have been forced. to back down again and again. So Trump. doesn't see getting involved in a war. against the Houthies as a winning. prospect. Vivian, I'm so curious given.

the fact that you're actually on the. ground in Riad and have been as all of. this has been playing out. What does all. of this pressure actually feel like? Like sort of how is it in the air there? So, it's kind of a weird moment because. the Houthis are attacking the kingdom. right now, but it's not reaching cities. like Riad. You know, it's mostly. affecting cities in the kingdom south. So, it's weird because everyone knows. that we're kind of potentially on the. verge of another war, but at the same. time, you know, events are happening, conferences are being held, they're. talking about tourism events next year.

There's still kind of an effort to keep. going and to sort of maintain the mood. that everything's going to be okay. We're going to figure a way out of this. And I'm sure they're still working very. hard to repair the pipeline and get that. back up and running as soon as possible. >> Is that realistic, though? How fast. could one repair a pipeline? Well, it's. a mystery right now because it depends. on how badly it's been damaged and these. are things that only a very small number. of people know. Probably we've seen some. reporting indicating that it could be a. matter of weeks. Even that is quite a.

bad situation for Saudi Arabia. But the. worst situation is the fact that no. matter how quickly they repair it, as. long as there is still conflict in the. region and as long as they have foes who. are still willing and able to attack the. pipeline, that will remain a risk. so. they could repair it tomorrow and have. another attack the next day. >> You know, I'm reminded there was a lot. of criticism after the US and Israel. went to war with Iran that they should. have taken more seriously the idea that. Iran would or could shut off the. straight of Hormuz, right? Like that was.

essentially foreseeable. So I guess I. just wonder whether it was just as. foreseeable that Saudis oil routes would. also be cut off. Like I'm just wondering. how predictable this latest iteration of. the war was. I mean, I think if you were. a really strategic and smart war gamer, you absolutely could have sit down and. game this out, you know, months ago. I. think one thing that the Gulf Arab. states that are American allies here, Saudi Arabia, Kuwait, United Arab. Emirates, these states always realize. that they were very vulnerable if Iran. were to launch major retaliatory attacks.

on, you know, the United States, that. they would be kind of the front lines of. that. They have these US bases. They. host these US troops, you know, they. have these American companies that do. business there and their energy, their. oil, and their gas is so crucial to the. world economy, that it is really just. the most strategic and easiest way for. Iran to exert pressure on a country. that's very far away, the United States. So, they've always known that they could. potentially be on the front lines of. something like this. And that's part of. why a lot of Gulf leaders and officials.

were trying to prevent this war from. happening in the first place. You know, I can't help but think, Vivian, about that man in Florida, the. gas station owner that we heard from at. the beginning of this episode, who's. worried that high gas prices are going. to go even higher. And obviously, that. is just one factor, one consequence in. this war. But it sounds like he and. other people need to prepare for a lot. more pain than we've already been. seeing. Yeah. I mean, the fact of the. matter remains is that we really still. haven't seen the end of this war. And. the longer it's going on, the more it is.

spiraling into these new kind of. complicated consequences. So Saudi. Arabia had this workaround in the early. months of the war that had masked the. true cost of the war for oil and gas. prices. That is changing now. And we're. also seeing kind of a real new kind of. snowballing of human suffering that. could be happening in Yemen alone. The. fact that the country is now tilting. back into this full-blown war could have. devastating consequences for tens of. millions of people who were already.

living in one of the world's worst. humanitarian crises. We're seeing kind. of all over the globe. all of these. consequences spiraling out from this war. between the United States and Iran that. are having really devastating impacts. for the economy, for people's ability to. afford energy and all of the goods that. come from that. What's becoming increasingly clear is. that these are not problems that are. going to go away quickly. These are. going to be complicated and they could.

potentially be long lasting. Vivian Nerim, thank you so much. Thank. you for having me. As oil prices [music] have surged past. $100 a barrel, people around the world. have taken to the streets to protest. price increases and gas shortages. In France, fishermen clashed with police. as they attempted to blockade a fuel. depot.

In Portugal, [music]. a convoy of frustrated drivers blocked. roads to a major oil refinery. >> And in Syria, >> where the government raised fuel prices. for a second time in two weeks, >> protesters blocked a major highway with. flaming tires. Syrian government officials said they. had no choice but to raise prices. because of the war.

>> [music]. >> We'll be right back. [music] Here's what else you need to. know today. The Federal Reserve raised. interest rates by a quarter of a. percentage point on Wednesday, the first. [music] increase in more than 3 years. That increase is a major step by the. central bank's chairman, Kevin Worsh, to.

[music] combat inflation, which Worsh. has said has been too high for too long. [music]. And President Trump on Wednesday. threatened retribution against the. European Union's invitation to Canada to. become [music] a quote associate member. of the block. A move that shows how. intent America's traditional allies are. on [music] pursuing a more stable future. by binding together. >> If it's a good intention, that's fine. If it's a bad intention, we'll put very. heavy tariffs on Europe.

>> The president said the move could be. perceived as a quote [music] hostile. act. Today's episode was produced by Jessica. Chung, [music] Olivia Nat, and Anna. Foley with help from Eric Cropky. It was. edited by Maria Burn, and Annie Moff. with help from Michael Benois. It. contains music by Dan Powell, Marian. Lozano, Rowan Nisto, and Pat McCusker. was engineered [music] by Chris Wood. Our theme music is by Wonderly. And. special [music] thanks to Ben Hubard.

[music]. [music]. That's it for the Daily. I'm Rachel. Abrams. See you tomorrow.