Gasoline topped $4.50 for the first time since July of 2022. Lowest income groups hardest hit.
A K‑Shaped Pattern at the Pump
A New York Fed survey shows lowest income groups are getting hit the hardest. It’s A K‑Shaped Pattern at the Pump
In March, high-income households increased nominal spending the most and kept real consumption essentially unchanged, while low-income households decreased real consumption of gasoline but still saw sharply increased nominal spending because of the rise in gas prices.
Higher-income households have reduced real gas consumption only modestly and increased gasoline spending considerably compared with 2023. In contrast, lower-income households increased spending by much less and decreased real consumption by much more, potentially by carpooling or substituting to public transit where available. [Mish: Or simply driving less, fewer trips and distances on vacation].
Airlines Cancelling Flights
The Independent reports All the airlines cancelling flights and adding extra charges amid jet fuel crisis
Around 13,000 flights were cancelled globally in May, resulting in two million fewer available seats, according to aviation analyst Cirium.
Alaska Air
The U.S. airline said it would increase fees for the first checked bag by $5 and by $10 for the second on its North American flights, as well as for its Hawaiian Airlines unit. It hiked prices for a third checked bag from $50 to $200.The carrier withdrew its full-year profit forecast as the sharp rise in jet fuel prices put pressure on margins.
American Airlines
The U.S. carrier said it would hike checked baggage fees by $10 each for the first and second checked bags and by $150 for the third checked bag on domestic and short-haul international flights. It also trimmed certain benefits for economy passengers.Delta Air Lines
Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 on first and second checked bags and a $50 increase on the third.The U.S. airline pulled all planned capacity growth for the current quarter and forecast profit below Wall Street expectations. Delta CEO said it would hold off on updating the full-year outlook given uncertainty over how long the fuel price spike would last.
Spirit Airlines
Spirit Airlines ceased operations on Saturday after efforts to save the struggling budget carrier fell apart.While customers with flights booked can expect refunds, Spirit is not providing any help in booking alternative travel plans. Several of Spirit’s competitors have offered capped ticket prices “specifically for Spirit customers who now need to rebook cancelled flights,” Transportation Secretary Sean Duffy said.
Southwest Airlines
The American carrier forecast second-quarter profit below estimates as margins were dented by high fuel prices. It previously said it would hike checked baggage fees by $10 for the first and second bags, raising costs to $45 for the first bag and $55 for the second.United Airlines
The U.S. airline’s CEO Scott Kirby said ticket prices may need to rise by as much as 15 to 20 per cent to offset a surge in jet fuel costs. The company already instated five fare increases late in the first quarter, along with higher baggage fees, which it said have started to offset rising fuel costs.The carrier also forecast second-quarter and full-year profits below Wall Street estimates and said it expected to recover only 40-50% of the increase in fuel prices through fares and other revenue measures in the second quarter, `improving to 70-80% in the third and to as much as 85-100% by the fourth.
The U.S. airline previously said it would cut unprofitable flights over the next two quarters as it prepares for oil prices to remain above $100 until the end of 2027, CEO Scott Kirby said.
It is also increasing first and second checked bag fees by $10 for customers travelling in the U.S., Mexico and Canada and Latin America, it said in an e-mailed statement to Reuters.
The article mentioned about 40 airlines. I put a spotlight in the main US airlines.
Diesel Price Spike Raises Stakes for Trump
Politico reports Diesel Price Spike Raises Stakes for Trump GOP Ahead of Midterms.
Most Americans are focused on the cost of gasoline at the station up the street — but diesel fuel costs are also poised to set an all-time high in the U.S., which in turn is expected to drive up prices for everything from groceries to postage.
A spike in diesel fuel affects a wide array of commodities that need to move across the country – including for home building, manufacturing and much more.
Voters may not know why the cost of goods that travel via freight are going up, but they’ll blame the party in charge, said Chuck Coughlin, a veteran Republican strategist and president of political consulting firm HighGround.
“The price of everything has gone up, Trump promised just the opposite,” Coughlin said. “He’s gonna pay a price at the polls.”
“Oil is at $102, that’s a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged,” Trump said.
On Monday, Treasury Secretary Scott Bessent told Fox News that fuel price spikes, which he called a “short-term blip,” are a “temporary aberration” that would be over in weeks or months.
“President Trump has always been clear that these are short-term, temporary disruptions,” she said. “The President brought oil and gas prices down to multi-year lows at record speed, and as traffic in the Strait of Hormuz normalizes, these energy prices will plummet once again.”
Beyond the impacts to the cost of everything from eggs to sneakers, the inflationary impact of high diesel fuel lasts much longer in the economy than gasoline prices, said John Auers, analyst at consulting firm RBN Energy. Trucking, rail and freight companies sign long-term supply contracts for their diesel, meaning that a higher price will be baked into their costs – and passed along to consumers — for months at a time.
“It goes into literally everything,” Auers said about where voters will experience higher diesel prices. “Most consumers aren’t buying diesel, but it definitely gets passed through.”
Diesel consumption is “what drives the US economy,” said Patrick De Haan, GasBuddy’s head of petroleum analysis.
High diesel fuel prices will start trickling down to the every day consumer in the coming weeks, he said. That is when it could start raising the costs on clothing, appliances, home prices and more for consumers who have already shouldered price increases tied Trump’s to tariffs.
And every day that the Strait of Hormuz – which handled about 20 percent of global oil volumes before the war started – remains closed, the worse the price consequences will be and the longer the recovery will take, he said. It could take longer than a year to get oil inventories back up globally.
“Even if there’s a quick reversal, this is not something that just goes away overnight,” he said. “It’s going to get worse before it gets better and it’s going to take a long time for it to get better at this point.”
At 900 truck stops across the country, prices are already at or above the record average high of $5.82, according to Dean Croke, principal analyst at DAT Freight & Analytics. Many smaller owner-operator truckers are parking their trucks because they can’t make any money with diesel prices at their current levels, he said.
About 20 percent of operators have parked their trucks amid higher fuel costs that can add up to $1,200 a week in added expenses, according to a recent survey by DAT Freight & Analytics. Half of owners are driving fewer miles and are being more strategic about what they are hauling, preferring lighter loads that require less diesel, the survey found.
“The longer it goes on, the more likely it is that we’ll see transportation become a much bigger deal than it is already,” Croke said.
Trump Always Been Clear
Yes. I have been taking notes on clearness.
The war was supposed to be over in 3-5 days, a couple weeks, and no longer than three weeks.
The war has been proclaimed won at least 8 times. We have had 3 or 4 proclamations that the strait is open, and we have had at least three announcements that Iran agreed to a deal only to be denied by Iran within hours.
So yes, Trump has always been clearly lying. And he is desperate for a deal. Iran isn’t.
Trump Threatens to Resume Epic Fury, Axios Reports a Framework for a Deal
Earlier today, I noted Trump Threatens to Resume Epic Fury, Axios Reports a Framework for a Deal
Even Bigger Than Before
Truth Social: Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran. If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before. Thank you for your attention to this matter! President DONALD J. TRUMP
May 06, 2026, 5:41 AM
Exactly what has Iran agreed to? But here are the rumors.
U.S. and Iran closing in on one-page memo to end war, officials say
Framework for Negotiation
There is no deal. But assume for a second there is a framework for negotiation.
The negotiation will take months, not weeks.
Q: And what will the US have accomplished?
A: The US will accept the deal that was on the table before Trump started this idiotic war. That deal will be no better than what Obama negotiated in 2015.
Trump Cancels “Operation Freedom” But We Have a new Goal
Yesterday, I commented Trump Cancels “Operation Freedom” But We Have a new Goal
It took all of one day for Operation Freedom to fail.
Rubio: “The facts clearly bear out, the United States of America holds all the cards. … Our preference is for the Strait to be open, to the way it’s supposed to be, back to the way it was. … That’s what we have to get back to, and that’s the goal here.”
The new goal is to return to the status quo of things before Trump started this stupid war,
Infrastructure damage is massive and there would only be a gradual release of oil through the strait, assuming there is a deal and it holds.
Gasoline prices will remain elevated, so will fertilizer and aluminum prices.
Trump will have effectively lost the war. It will show up at the midterm elections.
Why Trump Cancelled Project Freedom
This just in
Without access to Saudi and Kuwaiti airspace, the U.S. military could not provide the necessary defensive umbrella for ships, making the pause unavoidable.
huh, diesel is down .20/gallon in the last week.
lol this is classic corporate “we’ve got them now!” inflation. Rather than add a fuel surcharge, they are raising checked bag fees. Why? Because they won’t need to cut those when this whole thing is over. Those fees will now become the new normal.
Thanks Don!
“Yesterday, I commented Trump Cancels “Operation Freedom” But We Have a new Goal
The new goal is to return to the status quo of things before Trump started this stupid war,”
To be fair, the stated goals keep changing, because the stated goals were never anything but a pretext.
The real goal was ever always only to turn Iran into a failed state at the behest of Israel.
Since this could not be said out loud, we were treated to endless self-serving cofeve about protesters, nuclear dust, women’s rights, missiles, democracy, the Straits and Lord knows what other malarkey, served piping hot.
trump loves you. never forget.
The crude oil in my area comes from Canada, is refined in the US or southern Canada and prices are:
Regular: $4.99
Premium: $5.99
Diesel:: $6.09
Clearly Canada is profiting nicely from this and Carney is getting a chuckle at the windfall of dollars.
And I thought Israel was the only beneficiary. Add Canada, Brazil, Argentina, Ghana, Nigeria and all the little oil producers of the world that are pumping like crazy as our former middle eastern allies are shut out of global markets.
It’s great that you’re trying to think.
I said it before and I will say it again:
These market manipulations are the biggest sign that we are coming to the end of the system. Why?
Because the leadership (and this extends past Trump and why nothing is being done about it) do it out in the open, in everybodys face, and without a care for the consequences.
Why should they care? Consequences are for the poors.
The poor, the old, and the unsophisticated are always the ones who suffer the most from inflation. They are the ones who vote for the crooked politicians who promise them something for nothing. This is one of the things that make me skeptical about the continuation of democracy.
Carter finally got the hostages released But regan got the credit. Wonder if some along these lines are set up for the mid terms.
Republicans may get killed or the gerrymandering may blunt it a bit. Who knows. The republicans in ca or a dem in tenn/ Louisiana should change sides and try shape the opposition more to the middle.
There has to be someone’s name to the last min oil trades. Sounds like an investigation is in order. But its prob trumps family or friends so they would get pardoned.
Can we get back to the Epstein files yet.
Splains why the legal department at the SEC was gutted as soon as Trump was elected.
Yeah dems should focus on problems until trump is out then prosecute.
Pretty sure that the Saudi & Kuwati airspace rights suspension applies only to Israel.
Taco is shooting for another all-time high in energy prices in hopes of winning another trophy and/or award.
There’s supposedly a “plunge protection team” to keep the markets propped up and now it looks like we have an “oil and treasury bond yield (OY) crash team” to keep oil and bond yields suppressed.
In the past, I may have been outraged by it all but now I’ve learned to just profit from it all.
Do worry, Trump will find a way to make things even worse.™
No dude what the bond market is telling you is hard times ahead lower stocks and lower yields = recession maybe depression….
TRUMP BANNED FROM SAUDI MILITARY BASES: Donald Trump’s so-called “Project Freedom” reportedly collapsed after Saudi Arabia blocked the U.S. military from using key Saudi bases and airspace for the operation, according to new reporting from NBC News.
Per the report, Saudi leadership was furious after Trump abruptly announced the operation without proper coordination. In response, the Kingdom reportedly barred the U.S. from flying aircraft out of Prince Sultan Air Base or through Saudi airspace to support the mission — effectively grounding the operation and forcing Trump to pause it.
This is stunning. The President of the United States reportedly launched a major military operation in one of the most sensitive regions on earth… without securing support from key allies first.
NBC reports that even a direct call between Trump and Crown Prince Mohammed bin Salman failed to resolve the standoff.
Iran stood up to the US and has effectively won. Iran has taught Saudi and the rest of the Middle East nations that they don’t have to kowtow to Trump.
The fact Saudi is blowing off Trump tells you all you need to know where this is headed. If I were Israel, I’d be really worried right now. They’ve made enemies all over the world and now the chips are slowing moving to the other side of the table.
If you were Israel you would just add Saudi Arabia to the list (after Turkey) of Middle Eastern nations you want to have the US invade.
Well it’s going so well with just Iran, adding Saudi shouldn’t double the problem. /s
To be fair, the Saudi military is (intentionally kept) rather weak, fractured, and under control of the ruling family, lest some general or colonel start to get ideas.
They are lucky to have a straight to block.
Quite stunning that all GCCs would ban their airspace or bases to be used for any direct US military action or offensive strikes against Iran, The US could still use the carriers, but it is going to be much more difficult. The world in general seems to now be telling Trump to f*** off. First it was allies refusing to get involved (and some like Spain refusing to allow airspace to be used). Then it was China with the sanctions. Now it is the GCC.
The GCC is perhaps looking down the road and seeing a future where Iran controls the Strait of Hormuz indefinitely. They probably are thinking that Iran might not allow them to restart using the Strait as long as they have US military bases where strikes are being launched against Iran. Seems like a good assumption to me. So if you are a GCC, which is more important to you–getting access to the Strait again or having US bases, when you know the US will blind side you routinely? A massive rethink by the GCC is probably underway.
Iran has said that all along, ever since they were attacked.
The Gulf countries are finally listening to Iran.
Obviously someone is getting rich based on Trump’s rambling statement. Should we assume it is Trump himself? Based on this, why would he ever end the war?
Friends, family etc.
His net worth has increased by billions since taking office. Something tells me that by the time he exits it will be 10s of billions and he’ll be laughing all the way to the bank without caring what anyone thinks of his presidency.
The guy is a walking zombie with dementia and serious health issues, the billions are completely useless to him at his age. His pedo days are over.
but his mind is still focused on more money for him: Trump’s push to have his administration take a bigger stake in major American businesses is beginning to scare industrialists and executives, according to a new report.
“Some executives are so worried Trump will ask for a stake in their company that they have prepared for Oval Office meetings by rehearsing what they would say to fend off the president’s advances,” the Wall Street Journal reported on Wednesday based on information from the lobbyists involved in those preparations.
Trump is both impatient and desperate. Which makes him a terrible negotiator.
His biggest problem is his desire to win, while humiliating the other side. And he does it in a very public way. Iran will never let that happen.
Every time Trump shoots off his mouth with statements like these, it only strengthens Iran’s resolve.
“Iran should wave a white flag and surrender, we’ve won the war (8 times), we hold all the cards, we control the Strait, they are begging for a deal.”
It only makes Iran want to dig in and humiliate Trump. So they will continue to drag this out as long as possible, since they know he is desperate. They will continue to stop shipping through the Strait to force up prices and cause shortages.
The longer this goes on, the more we draw down global available storage of oil, gas and petrochemicals. Eventually we will simply run out of stored items. First to run out will be diesel, jet fuel and lpg. Gasoline will take much longer.
Some locations around the globe are already running out. In the US, we will see shortages by July (unless we stop exports).
I won’t predict actual prices, but as we run out of supply, prices will go higher.
It won’t matter what runs out first because the first thing that will happen is massive panic then violence. Forget about toilet paper brawls, we’re talking fights for the last scraps of meat, eggs, water and milk.
And now you know why I’ve been advocating an exit strategy or at the very least, stocking up on canned foods, beans, rice, and whatever else is non-perishable. Guns and ammo a good choice too to defend what you have stockpiled. Food is dirt cheap now in comparison to what could come and likely come at this point.
Diesel doesn’t need to run out, just get expensive enough that truckers balk at taking deliveries to your local Walmart/Costco/CVS or whatever.
The sheeple are distracted with tiktok scrolling and their daily grind and they’re headed to the slaughterhouse.
Some truckers are already parking their trucks as they can’t make any money at these diesel prices.
I know one, a bull goose MAGA. He still won’t give up the faith. He’s also a Full On Catholic and thus has his mind busy to trying to explain that the Pope didn’t really mean what he just said, or that this time, it doesn’t count or something.
Good times, good times.
Yes but unless your exit strategy is Canada or Russia or a few other undesirable locations, it will be to a place where they can’t just simply stop exporting oil and, voila, oil is readily available. Papa Dave’s parenthetical comment is important. If the US were to ban exporting oil there wouldn’t be an immediage or imminent shortage in supply here.
That said, I’m puzzled by your constant consternation when it’s clear you, and likely nearly everyone else in this comment section, are profiting nicely off the rambling, manipulative language daily. I mean if I had profited to the degree things have moved upward for the last month I don’t think I’d be bitching about gas or food, I’d just spend the insane passive gains on the preparatory things you’ve mentioned and call it profitable. I mean you should be thrashing in this like a shark in chum-filled waters. This is daily market manipulation.
I do recall 2012 being painful in terms of prices of oil/gas/diesel and the commodities space. We averaged 455 miles per day driving on a family trip out west and gas was $5-6.50+. Indexed for inflation elsewhere, 14 years later, and we have a ways to go…but the trend looks that direction. It was so extreme that fallow farmland was worked for the first time in 50 years to extract profit from corn and beans and they are still farming it now. You are correct that diesel is the pain point for sure–most farmers and businesses are hedged. Spirit Airlines not so fortunate, painful for the others for sure. The longer it goes the more pain is inflicted–markets seem sanguinely immune at the moment. I guess AI and the surefire profits will solve everything despite my not really knowing anyone that profits from it other than through the Nasdaq/SP.
There are LOTS of people profiting from this insanity–hence the K shaped economy. Enjoy being in the upper right portion of the letter.
It should be self-explanatory and it was in the first thing I said would happen, “panic and violence.” Having a mountain of money is nice but money doesn’t stop bullets from penetrating your body nor stop mobs from burning down buildings.
How many times in your lifetime have you see riots? How did money stop any of it? The fact is that once the STHF, no one will be safe, especially not the rich.
And even though I have plenty of guns and ammo and even body armor, it won’t be enough to stop tens, dozens, hundreds, thousands of desperate angry hungry people.
Airlines are already planning on cutting tens of thousands of flights for the summer and that’s today and we’re not even out of fuel yet.
I hope this explains it.
The good of the future of humanity is more important than a month or a year of absurd returns. Some of us hold ourselves to a reasonably high moral standard, even when our President leads by the reverse of what should be a good example.
As soon as Walmart/Costco/CVS/whatever cannot get their shipments due to truckers not willing to drive at a loss, they will just pay the truckers more and charge more to their customers.
Oh is that what happened during COVID? Why were there toilet paper fights? What happens to store during every hurricane and that’s just due to storms, what happens when oil is $200/barrel and gas $20/gal?
You don’t remember bare shelves and it was only a few years ago? Wow poor memory and poor thinking.
Toilet paper shortages during COViD was caused by toilet paper factories jot making more, but everyone was trying to buy a years worth instead of the normal month’s worth. If it was a trucker thing, all the shelves would have been short.
Wait you mean shortages in the supply chain drive inflation? You mean it isn’t entirely driven by Joe Biden?
This is my feeling too, looking at the Iranian press. They are rightfully suspicious of everything Trump says and does, and will not give Trump the massive propaganda victory over Iran he desperately wants to take credit for.
Plus, they don’t trust him to keep his word, or trust any “deal” he signs. So why should they give anything up in order to get a deal with him. After all, he reneges on almost every deal he makes.
“Almost” every deal?
Well, I guess Trump is loyal to Israel, but that’s only because they have a slipknot around his dinky.
Papa, how do you see this playing out if nothing changes? The government keeps shorting the market to keep contract prices low, but doesn’t that blow up at some point? Seems like the oil companies could make more money just putting a fixed price on their product rather than allowing the government to beat it down, but I really don’t understand how the difference between contract price and spot price materializes.
The more Trump shoots off his fool mouth, the greater his own humiliation.
will they cut the cable?
https://www.eurasiantimes.com/irans-undersea-cable-attack-could-cripple-global-internet-and-10-trillion-daily-flows-after-hormuz-blockade/
wow so if this ends Hormuz will be passable again like it was before this started?
Yes except for this privilege of back to where we started, it has cost soldiers’ lives and should be well over $100BB if not $1TT when all is said and done. What a stupid tax we are paying, eh?
And that doesn’t even address the power Trump gave to Iran, with their knowledge of the power of their open and close button they can press on SOH.
The first war in history that’s ending tomorrow everyday while also already being over and never even a war to begin with actually, so you see, it’s not the war, it’s the gas prices who are wrong.