U.S. gas prices jumped past an average of $4 a gallon for the first time since 2022 again as the Iran war continues to drive fuel prices up worldwide.
According to motor club AAA, the national average for a gallon of regular gasoline is now $4.02 — over a dollar more than before the war began, with some states paying well over the $4 mark.
In Texas, the average is $3.67.8 for regular gas, $4.522 for premium, with diesel costing $5.029 per gallon. The state average a month ago showed the price per gallon for regular averaged $2.597 a gallon and diesel, $3.395 a gallon.
The last time the U.S. saw this much increase was nearly four years ago, following Russia’s invasion of Ukraine.
Since the launch of the Iran war on Feb. 28, the cost of crude oil has spiked rapidly due to supply chain disruptions and cuts from major oil producers across the Middle East.
Gas prices climbed all over the world with the highest besting in Hong Kong at $15.37 per gallon, Monaco, Iceland, Norway, Denmark. European countries such as Germany, France and Finland are paying around $9.43 per gallon. The cheapest price per gallon are Libya ($0.09), Iran ($0.11) and Venezuela ($0.13).
Gas prices are extremely low in Libya and Venezuela primarily due to massive government subsidies and their status as major oil producers, which allows them to bypass high transportation costs and taxes. These countries use artificially low fuel prices as a form of social welfare, political stability, and as a key component of their economic model, with prices often kept lower than bottled water.
Gas prices in Iran are among the lowest in the world primarily due to massive government subsidies aimed at supporting the domestic economy and maintaining social stability. As a major oil-producing nation with large reserves, Iran sets internal energy prices through policy, insulating consumers from global market volatility and fluctuations.
In the United States, higher gas prices for consumers and businesses who were already facing cost of living increases on everything due to tariffs - are again faced with cutting budgets in other places to accommodate the high gas prices.
More expensive fuel also pushes up other spending, from utility bills to the price of many daily goods consumers.
Analysts point to many retail and groceries, which may have to be restocked often and could see price hikes as businesses’ transportation costs pile up.
Because hauling cargo and packages have been impacted, the United Postal Service, is seeking a temporary 8% added charge on some of its popular products including Priority Mail.
U.S. diesel prices — the fuel used for many freight and delivery trucks — is now going for an average of $5.45 a gallon, up from about $3.76 a gallon before the war began, per AAA.
Should the war continue, prices could climb even higher.
With oil tanker movement limited in the Strait of Hormuz - where about one-fifth of the world’s oil typically travels - major producers in the region have no way of getting their crude to market. Meanwhile, Iran, Israel and the U.S. been striking oil and gas facilities, worsening supply concerns.
Though the Trump administration eased some sanctions on oil from Venezuela and Russia, and is waiving maritime shipping requirements for 60 days, it is not clear just how much relief it will bring to consumers.
Refineries buy crude oil in advance and may have to resort to working with more expensive oil, and it will still take time for supplies to reach customers.
U.S. gas prices are expected to increase more as summer nears with its higher demand and shift to summer blend fuel, which is more expensive than the winter blend.
The U.S., which is a net oil exporter, and most of what the U.S. produces is light, sweet crude — but refineries on the East and West coasts are primarily designed to process heavier, sour product. As a result, the country also needs imports, and those may not be forthcoming without a resolution to the Iran war.