Gas Prices Hit $3.96 Per Gallon — Highest Since August 2022 — as Iran War Chokes Global Oil Supply

American drivers pulled into gas stations Monday to find prices they haven't seen since the summer of 2022. The national average for a gallon of regular gasoline reached $3.96, according to the AAA fuel gauge, the highest reading since August of that year and up roughly 80 cents from the day before the United States launched military operations against Iran on February 28. The surge — the 23rd consecutive daily increase, an unbroken streak with no modern parallel — is the most direct way the Iran war has arrived in the wallets of ordinary Americans, and analysts warn that $4-a-gallon gas may not be the ceiling.

The root cause is the Strait of Hormuz, the 21-mile-wide channel connecting the oil and gas fields of the Gulf to the rest of the world. Iran has effectively blockaded the passage for most commercial shipping since early March, selectively permitting only vessels from countries it considers friendly or neutral. About 20% of the world's traded oil passes through the strait on a normal day, along with roughly a third of globally traded liquefied natural gas. With that supply disrupted, West Texas Intermediate crude oil briefly spiked above $120 per barrel earlier in the conflict before settling around $85 to $95 in recent days — still far above the $70 range that prevailed before the war. Patrick De Haan, head of petroleum analysis at GasBuddy, said Monday that he now expects the national average to crest $4 per gallon within days.

The IEA's executive director, Fatih Birol, has described the oil shock as potentially worse than either of the two crises of the 1970s that produced years of stagflation across Western economies. The United States produces far more of its own oil than it did then — thanks to the shale revolution of the past two decades — but remains deeply integrated into global markets, where prices are set by worldwide supply and demand. Trump announced $20 billion in maritime insurance for Persian Gulf shipping earlier in the conflict and has repeatedly characterized rising gas prices as "short-term pain" caused by a conflict he says was necessary. Democrats have seized on the pump price data to argue the costs of the war are falling disproportionately on working families.

The pain is not uniform. California, which has the highest state gas taxes in the country and limited refining capacity, has seen averages reach $5.20 per gallon in some markets. Diesel, the fuel that powers the trucks carrying most of the nation's goods, stands at $4.66 nationally — a level that economists say will begin to show up in grocery and retail prices within weeks. Households in the bottom quintile of income spend a far larger share of their budgets on transportation fuel than wealthier Americans, and economists at the Brookings Institution published analysis Monday suggesting the gas price shock is effectively a regressive tax, hitting the most financially precarious families hardest at a time when many are still recovering from post-pandemic inflation.

JPMorgan warned in a note to clients Monday that elevated fuel prices could persist through the fall, driven not only by the Hormuz closure but by the approach of peak summer driving season in the United States and Europe. Ian Bremmer, president of the Eurasia Group, told CNN that the situation on the ground in the Middle East could produce "a very ugly summer for American consumers" if diplomatic efforts to reopen the strait fail. The Trump administration's envoys Steve Witkoff and Jared Kushner were engaged in back-channel efforts Sunday and Monday, with Pakistan, Turkey, Egypt, and Oman serving as intermediaries. Whether those efforts succeed — and how quickly — will determine whether motorists see relief or a continued march toward $5.