US Gasoline Prices Rise to $3.70 per Gallon, Up 24% Since Start of Iran War

Average gasoline prices in the United States have climbed to $3.70 per gallon, marking a 24% increase since the outbreak of the Iran-related conflict on February 28, according to data released Sunday by the American Automobile Association.

The latest figure represents the highest gasoline price level in the United States since May 2024, amid mounting concerns over global oil supply disruptions tied to escalating tensions involving Iran, Israel, and the United States.

Energy markets have been particularly sensitive to developments in the Strait of Hormuz, a key global oil shipping route through which a significant portion of the world’s crude exports passes. Disruptions and attacks on vessels in the region have fueled fears of constrained supply, pushing fuel prices higher worldwide.

The surge in gasoline prices mirrors the sharp increases seen four years ago following the Russian invasion of Ukraine, highlighting the speed with which geopolitical shocks can ripple through global energy markets.

Rising fuel costs could also present a political challenge for Donald Trump and the Republican Party ahead of the upcoming U.S. midterm elections scheduled for November. A key element of Trump’s successful 2024 presidential campaign was his pledge to reduce energy costs for American consumers.

William Stern, CEO of small-business lending firm Cardiff, said geopolitical shocks can quickly affect household budgets.

“Geopolitical shocks don’t take months to hit your wallet — they take days. You feel the pressure immediately when you fill your tank to drive your kids to practice,” Stern said.

Analysts expect gasoline prices to continue rising in the coming days, particularly after additional attacks on shipping in the Strait of Hormuz earlier last week. The transition in the United States to summer-blend gasoline, which burns cleaner but is more expensive to produce, is also contributing to higher costs.

According to Denton Cinquegrana, chief oil analyst at Oil Price Information Service, wholesale gasoline prices posted double-digit increases late last week, noting that changes in wholesale markets typically appear at retail gas stations within a day.

Meanwhile, crude oil prices, the largest component of gasoline costs, have continued to rise despite a proposal by the International Energy Agency to release 400 million barrels of oil from strategic reserves.

Cinquegrana added that the agency’s announcement has raised questions about which countries would contribute oil to the release, how much would be supplied, and when the additional barrels would reach the market.