Gas prices in the U.S. have surpassed $4 per gallon due to the war in Iran
The average retail price of gasoline in the U.S. has surpassed $4 per gallon for the first time in three years. According to GasBuddy, this comes amid the ongoing armed conflict between the U.S., Israel, and Iran, which is destabilizing global energy markets.
This was reported by Reuters.
The last time prices reached this level was in August 2022, following Russia’s invasion of Ukraine. Analysts note that $4 per gallon is a psychological barrier for consumers. The rise in fuel prices is driven by rising oil prices due to Iran’s de facto blockade of the Strait of Hormuz—a key trade route.
American households are already feeling the price hikes, and this is creating political challenges for President Donald Trump and the Republican Party ahead of the U.S. midterm congressional elections in November.
Although Trump promised to increase energy production and lower prices, his second term has been marked by market volatility and geopolitical upheaval. Since the start of military operations against Iran in late February, the retail price of gasoline in the U.S. has risen by $1.06 per gallon, or 36%.
“A sudden outbreak of war always leads to a sharp rise in gasoline prices. This happened amid the current conflict in Iran, just as it did after Russia’s invasion of Ukraine in 2022. Then, as now, oil prices rose worldwide, and emergency oil reserves were tapped. But we expect this crisis to be shorter: back then, gasoline remained above $4 for 23 weeks. Currently, we expect prices to start falling in the coming weeks,” noted Raymond James analyst Pavel Molchanov.
At the same time, prices at gas stations could rise even further if crude oil prices continue to climb. The Trump administration is attempting to curb price increases, notably by temporarily suspending the Jones Act, which allows foreign vessels to transport fuel and other goods between U.S. ports. However, experts expect only a minor impact from this move.
A Reuters poll showed that 55% of Americans have felt the negative impact of rising prices on their finances, while 21% of respondents described it as very significant.
“The key issue isn’t just Syrian oil itself. Gasoline is the most significant component of the economy for consumers. And when fuel prices spike, it immediately takes a psychological toll,” emphasized WisdomTree economist Jeremy Siegel.
On Tuesday, oil prices remained virtually unchanged as investors weighed the likelihood that U.S. President Donald Trump would halt military action against Iran.
As a reminder, the global energy market was shaken by a new wave of rising oil prices following a series of attacks by Yemeni Houthis on Israeli territory.
Recall that the conflict surrounding Iran has seriously impacted financial markets.
Also, the small island of Khark is key to Iran’s economy.
