Gasoline Prices Surge as Iran War Rattles Global Oil Markets

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Gasoline prices in the U.S. have climbed roughly 70 cents nationwide since the start of the Iran war in late February, with the national average now around $3.70 per gallon. The surge is tied to oil prices above $100 per barrel and fears that fighting could disrupt a key global shipping route for crude through the Strait of Hormuz. Prices have risen even higher in some areas, with California averages climbing above $5 per gallon and some Los Angeles stations charging over $8 per gallon during supply shocks.

Why it matters

The sharp rise in fuel costs has raised concerns about inflation and the broader impact on the economy, as higher energy prices can ripple through transportation, food, and consumer goods prices. Federal officials warn that prices could remain elevated for weeks as markets stabilize, with no guarantees of a quick decline.

The details

The main driver of higher fuel costs is the surge in crude oil prices, with Brent crude recently climbing above $100 per barrel. Energy analysts say the conflict in Iran threatens global oil supply in several ways, including disrupting shipping and energy infrastructure around the Persian Gulf and potential blockades of the Strait of Hormuz, through which about 20% of the world's oil normally flows.

• On February 28, the national average price of regular gasoline was just below $3 a gallon.
• After 16 days of fighting against Iran, the average price has surged to $3.70 a gallon, a 23% rise.

What they’re saying

What’s next

The U.S. and its allies are planning to release large amounts of oil from strategic reserves to ease shortages, though analysts say that may only provide temporary relief.