The US national average price for gasoline rose above $4 a gallon on Monday, marking the first time in more than three years that drivers have faced such levels, according to GasBuddy data. The surge follows the escalation of the US-Israeli conflict with Iran, which has disrupted energy markets and raised concerns about global oil supply.
The $4 per gallon mark, last seen in August 2022 after Russia’s invasion of Ukraine, is widely considered a psychological threshold for consumers. Analysts warn that the milestone could further strain household finances already under pressure from rising costs of food, housing, and other essentials.
Since the start of the conflict at the end of February, US retail gasoline prices have increased by roughly $1.06 per gallon, or 36 percent. Diesel and other petroleum-based products have seen similar upward pressure, raising costs for goods transport and consumer prices across the country.
“The sudden outbreak of war leads to a spike in US gasoline to $4.00 per gallon. That describes the current Iran conflict, as well as Russia’s invasion of Ukraine in 2022,” said Pavel Molchanov, an analyst at Raymond James. “While gasoline remained above $4 for 23 weeks in 2022, we expect prices to begin cooling in the coming weeks if the conflict is contained.”
Crude oil futures reflected the same trend, with US oil settling at $102.88 a barrel on Monday, up $3.24. Prices surged further after Kuwait reported that an oil tanker had been attacked at a Dubai port. The Strait of Hormuz, a critical waterway for global oil shipments, has been effectively closed, slowing energy transportation across the Middle East.
The Trump administration has taken steps to ease supply pressures, including temporarily waiving the Jones Act to allow foreign-flagged vessels to transport fuel and other goods between US ports. Industry experts, however, say the waiver is unlikely to significantly reduce pump prices.
High gasoline costs are already weighing on American households. A Reuters/Ipsos poll found that 55 percent of respondents reported their finances had been affected at least somewhat by rising fuel prices, while 21 percent said the impact had been severe.
“The key issue is not simply crude oil itself. It is gasoline, the most visible price in the economy for consumers, and when that price jumps it hits psychology immediately,” said Jeremy Siegel, an economist at WisdomTree. “That matters, even if the broader economic effect is more balanced than the headlines suggest.”
With continued instability in the Middle East, experts warn that gasoline prices could rise further in the coming weeks, keeping pressure on consumers and adding uncertainty to the broader US economy.
