Oil prices soar: Diesel surpasses $6 per gallon for first time as fighting escalates in Middle East

The escalation and intensification of the conflict in the Middle East continues to drive up the price of oil, which has already comfortably surpassed $100 per barrel. As a result, the price of a gallon of diesel exceeded an average of $6 for the first time in the U.S., according to the AAA. The situation became even more complicated on Friday after the Houthi rebels seized an island in the Bab al-Mandab Strait, a key chokepoint for oil traffic, as it controls access to the Red Sea from the Indian Ocean.

The instability in the region, with a shrinking window for peace given the stances of Washington and Tehran, coupled with the entry into the conflict of the Houthis and Saudi Arabia have led to oil prices to rising above the symbolic barrier of $100.

Oil shows no signs of letting up, remains above $100 per barrel

After the close of Asian markets, and in the early hours of European trading, a barrel of WTI, the U.S. benchmark, remained above $100, a key symbolic barrier that Brent has more than surpassed, standing at $104.7.

Also contributing to the price surge have been the Iranian oil tankers sunk by CENTCOM and the cargo ships carrying Saudi crude attacked by the Houthis in the Red Sea, widening the scope of the conflict and amplifying its impact on the markets.

More pressure: Houthis control strategic Bab al-Mandab Strait

In this regard, the Houthis announced that they had taken control of the island known as Penim or Mayyun. This was confirmed to AFP by a local government official: "Several boats carrying armed Houthi fighters on board arrived yesterday on the island of Mayyun following the withdrawal of government forces from the island. The Houthis have completed their takeover of the Bab al-Mandab area and the island of Mayyun, located in the middle of the strait."

In addition, an eyewitness stated that armed men were "moving along the coast of Bab al-Mandab and traveling in military vehicles." In response, Saudi forces launched new airstrikes against Houthi-controlled areas, hitting the Mocha airport.

Bab al-Mandab connects Asia with Europe via the Red Sea and the Suez Canal. It has gained importance as a crucial transit route for oil flows from Saudi Arabia, the world's largest oil exporter, since the start of the war in the Middle East.

Trump says Iran is "desperate to try and affect the election" via oil prices

The current state of oil prices is a severe blow to families' pocketbooks and a serious setback to the GOP's chances of retaining control of Capitol Hill. Donald Trump is aware of this, and directly accused Iran of being "desperate to try and affect the election" by driving up oil prices.

The president asserted that this oil price rally will end as soon as the midterms are over—at the latest—since the economic pressure on the Iranian regime is bearing fruit and the U.S. is achieving "asphyxiation" of the regime.

War in Ukraine also contributing to rise in prices

"Refineries in the Middle East are operating at reduced capacity" due to the conflict, which is significantly limiting exports from Gulf countries and has damaged some oil facilities, explained Arne Lohmann Rasmussen, an analyst at Global Risk Management, in statements to AFP.

Added to this are the "export problems in Russia," one of the world's leading producers of hydrocarbons. In response to repeated Ukrainian attacks on its oil infrastructure, Moscow extended the moratorium on diesel exports enacted in late July.