U.S. drivers are paying the highest gasoline prices in more than a year and a half as the U.S.-Iran war disrupts global oil trade. The national average price for unleaded gasoline rose to about $3.54 per gallon on Tuesday, according to AAA. That level is the highest since mid 2024 and represents a 21% increase from a month earlier.
The latest run-up follows a sharp repricing of crude and refined products after the conflict intensified. The disruption is tied to the Strait of Hormuz, a critical corridor for global energy shipments. Market volatility has translated into swift moves at the pump, including the biggest three-day jump in gasoline prices since Hurricane Katrina in 2005, according to analysis cited in the report.
Oil Volatility and the Strait of Hormuz Shock
Crude prices have swung widely as traders recalibrated supply and risk assumptions. U.S. crude was last around $84 per barrel after briefly surpassing $100 earlier in the week. The rapid moves reflect uncertainty over the duration of the disruption and the risk of wider spillovers across regional infrastructure and shipping routes.
Saudi Aramco CEO Amin Nasser warned the conflict could have “catastrophic consequences” for the global oil market. He said the current disruption is the biggest crisis the region’s oil and gas industry has faced. The warning adds to concerns that prolonged constraints could raise energy costs across the global economy.
Gasoline prices had been near lows last seen in 2021 before the recent spike, based on AAA tracking. Even after the latest increase, prices remain below the peaks seen after Russia’s invasion of Ukraine in 2022. Still, the speed of the move has heightened consumer sensitivity and renewed inflation concerns.
Affordability Risks and the Political Stakes
Higher fuel costs threaten to undermine the White House focus on lowering living costs. Affordability remains a central issue heading into U.S. midterm elections in November, which will determine control of Congress. President Donald Trump has argued that energy prices are a key lever for containing broader inflation.
Earlier this year, Trump said there was “virtually no inflation” and cited falling energy costs as evidence the U.S. had “defeated” inflation. The recent surge complicates that narrative. Trump said Monday he expects the war to end “very soon,” offering the possibility of relief. At the same time, Defense Secretary Pete Hegseth described Tuesday as the “most intense day of strikes” in Iran, reinforcing uncertainty over timing.
If elevated crude prices persist, the effect could extend beyond fuel. Higher transportation and input costs can influence goods prices and inflation expectations. The report notes that energy market outcomes now depend heavily on how long the conflict persists and how quickly trade flows can normalize.
Seasonal Pressures and What Happens Next at the Pump
Gasoline prices often rise at this time of year as seasonal demand builds, according to AAA spokesperson Aixa Diaz. The spring travel period can tighten local markets. In addition, a shift toward summer-blend gasoline later in spring typically increases costs compared with winter blends.
Diaz said elevated crude prices, combined with seasonal factors, are driving higher pump prices. She emphasized that oil is a volatile global commodity and that the path ahead is uncertain. A key variable is whether crude prices climb further or stabilize near current levels.
Raymond James analyst Bobby Griffin said pricing dynamics will differ depending on oil’s trajectory. If crude continues rising, retailers may need to raise pump prices to protect margins. If crude stabilizes, margins could be squeezed for several weeks. Even if crude falls, drivers may not see immediate relief, since retail prices often adjust downward more slowly than costs.
For consumers, the near-term outlook hinges on conflict duration, shipping constraints, and how quickly energy markets can reprice risk. Until those signals become clearer, gasoline prices are likely to remain sensitive to headlines.
