Gas prices surge past $3 per gallon as Iran conflict pushes oil higher, raising costs for drivers and inflation concerns nationwide
U.S. average retail gasoline prices are poised to exceed $3 a gallon for the first time in over three months on Monday, driven by the conflict between the United States and Iran disrupting global oil flows. This price increase poses a significant political risk for President Donald Trump and the Republican Party ahead of the November midterm elections, as voters remain concerned about inflation. Analysts predict that average pump prices could surpass $3 per gallon on Monday, a milestone not seen this year.
Prices last broke above $3 nationwide in November 2025, according to GasBuddy data. In February, prices were as low as $2.85 a gallon.
"Oil will move first. Gasoline will follow but gradually," De Haan said in a blog post after the strikes on Iran.
Iran, a major oil supplier, has reportedly closed navigation through the Strait of Hormuz following U.S. and Israeli air strikes that killed its Supreme Leader Ali Khamenei. The Strait of Hormuz is a crucial chokepoint in the Middle East Gulf, through which approximately one-fifth of the world's oil is transported by tanker. At least three tankers have sustained damage in the region, prompting major shippers to announce they will avoid the strait.
Global benchmark Brent crude saw a 10% jump to around $80 a barrel on Sunday due to the escalating impacts. Some analysts are forecasting that Brent could reach $100 as the Middle East enters a new period of conflict.
Bob McNally, president of Rapidan Energy Group, an energy consultancy, stated that the White House appears prepared to accept the political ramifications of higher oil prices to advance its foreign policy objectives.
"Their eyes are wide open to the risk, and I expect they will focus on shortening the amount of time Iran has to control the flow of energy through the Strait of Hormuz," McNally said.
McNally also suggested that the White House might signal a willingness to release oil from the U.S. Strategic Petroleum Reserve to curb excessive price increases. He recalled that former U.S. President Joe Biden authorized a substantial drawdown of the SPR in 2022 to address surging prices following Russia's invasion of Ukraine, a move that drew sharp criticism from Trump and other Republicans. The White House did not immediately provide a comment when contacted for requests.
Prior to the U.S. action in Iran, gasoline prices in the United States were already on an upward trend. Refiners had begun transitioning to a more expensive summer-grade fuel in recent weeks, a requirement mandated by environmental regulations aimed at reducing air pollution during warmer months, according to De Haan. Gasoline demand typically peaks in the United States during the summer vacation season.
"We were all set to rise to $3.10-$3.25 a gallon with a peaceful Persian Gulf. We'll now get there very quickly and the action of the last 48 hours puts higher numbers in play," said Tom Kloza, senior adviser for fuel supplier Gulf.
Kloza indicated that a $5 per barrel increase in crude oil prices should translate to an approximate 12-cent per gallon rise for gasoline and diesel. However, some suppliers had already increased wholesale prices by as much as 25 cents per gallon.
The current price surge represents a reversal of months of declines that began in the middle of last year. These declines were primarily attributed to high inventory levels and sluggish demand growth. These substantial stockpile levels could potentially act as a buffer against global market disruptions and moderate the current price spikes.
According to the most recent available government data, U.S. gasoline stocks stood at 254.8 million barrels as of February 20, nearing their highest point since the coronavirus pandemic. These stocks are equivalent to 30 days of supply.
"I expect a lot of (price) volatility tonight, but markets will likely start to settle down a bit after the first furious hour," De Haan said.