- On Tuesday, the average cost of gas across the U.S. hit $4.01 per gallon.
- Gas prices are currently over $1 per gallon more than a month ago.
- Experts say fallout from ongoing Iran war will push prices even higher.
The average cost of gas across the U.S. broke the $4 per gallon mark Tuesday for the first time since the summer of 2022 as energy assets continue to be targeted amid the ongoing Iran war.
AAA released its latest national analysis of U.S. gas prices Tuesday morning, just hours after reports surfaced that Iran forces had struck a Kuwaiti oil tanker in the waters off Dubai and a critical shipping passage through the Strait of Hormuz remains closed.
U.S. drivers are currently paying an average of just over $4.01 for a gallon of regular, more than $1 per gallon more than this time last month. Petroleum industry experts say that cost is likely to keep rising as the Middle East conflict enters its fifth week. The last time U.S. prices exceeded $4 per gallon was at the onset of Russia’s invasion of Ukraine in 2022. Prices would eventually hit an all-time high of over $5 per gallon in June of that year.
“Gasoline and diesel prices continue to climb to multi-year highs as the effective closure of the Strait of Hormuz curtails the flow of millions of barrels of crude oil each day,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in a Monday blog post. “The situation remains highly volatile and unpredictable, but upward pressure on fuel prices is likely to persist as long as global oil supplies are constrained by the continued disruption in the Strait.
“Americans have already spent nearly $8 billion more on gasoline over the past month, a trend that poses growing risks to the broader economy, while surging diesel prices may begin to reaccelerate inflation.”
In a social media post Tuesday, President Donald Trump lambasted some allies for failing to support the U.S. military actions in Iran and suggested countries trying to navigate the fuel shortages wrought by the war could turn to the U.S. for help.
“All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the U.S., we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT,” Trump wrote on Truth Social. “You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us. Iran has been, essentially, decimated. The hard part is done. Go get your own oil!”
How will rising energy costs impact the broader economy?
A report released last week forecasts that the increase in energy costs is on a path to foment even broader negative impacts on the U.S. economy.
The analysis from the Organization for Economic Cooperation and Development predicts U.S. inflation will rise to 4.2% in 2026, far ahead of the 2.68% average rate throughout 2025.
“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the report reads. “A halt in shipments through the Strait of Hormuz and the closure or damage of energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilizers.
“The breadth and duration of the conflict are very uncertain, but a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation, with adverse consequences for growth.”
While gas prices may be the most clear evidence of impacts the Iran war is having on family budgets, higher energy costs come back to hit consumer pocketbooks in numerous other ways.
Regular gasoline prices have risen sharply, around 30%, since the U.S. and Israel launched attacks on Iran late last month, but diesel fuel, which powers the trucks and other vehicles that transport raw materials, consumer goods, agricultural products and much more around the world is up even more, with diesel prices currently 50% higher than before the conflict began. The average price for a gallon of diesel across the U.S. was $5.45 on Tuesday according to AAA data, up from $3.76 per gallon a month ago.