Gas prices at U.S. pumps spiked above $4 a gallon for the first time since the summer of 2022, as the war in Iran sends oil costs surging.
The national average price for a gallon of gas was just over $4.01 on Tuesday, according to AAA. The last time that happened was during the inflationary surge in 2022, fueled by pandemic qualms and Russia’s invasion of Ukraine. At that time, the price for a gallon eventually climbed above $5.
That could be coming for American drivers again, as the war rages on and the price of a barrel of Brent crude, a global benchmark, crested to $113 on Friday.
The critical Strait of Hormuz, linking the Persian Gulf to the Gulf of Oman, is effectively closed to marine traffic. Because about one-fifth of the world’s oil and natural gas flows through the strait, the disruption has sent oil prices soaring, causing countries to tap into reserves and start rationing in some parts of the world.
The United States is not at an immediate risk of an oil shortage, but because the market is so global, the disruptions are sending prices at the pump to levels not reached in years.
The cost of gasoline varies widely throughout the country. Prices are especially high on the West Coast.
Rising fuel costs are one of the most visible signs of the economic effects of the war, because so many Americans drive and pass pumps on a daily basis, said Diane Swonk, chief economist at KPMG. But gas prices are not the only effects American consumers will feel — soon prices at grocery stores are expected to rise, as the cost of transporting and manufacturing goods goes up.
“This is only the beginning,” Swonk said.
Rising prices and geopolitical turmoil are making their way into consumers’ psyches, sending a closely watched measure of economic sentiment down nearly 6 percent in March.
President Donald Trump said last week that the U.S. is continuing talks with Iran, and he postponed his deadline demand for Iran to reopen the Strait of Hormuz.
But experts caution that even if the strait begins functioning again soon, it will take months for the oil supply chain to recover. Campbell University maritime historian Sal Mercogliano said recovery would take about one week for every day the strait has been blocked. (The blockage has now lasted about a month.)
He thinks of the global oil market as an interconnected web.
“If you sever one of the legs of the web, the other ones assume the weight,” he said.
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