The national average price for gasoline in the United States has exceeded $4 per gallon for the first time in nearly four years as the ongoing war in Iran continues to disrupt global energy markets. According to the motoring group AAA, the average cost of a gallon of regular gas now stands at $4.02, more than a dollar higher than before the conflict began. Diesel prices have also risen sharply, reaching around $5.45 per gallon, up $1.70 from pre-war levels.
The spike in fuel prices comes after the effective closure of the Strait of Hormuz, a key shipping route for oil and gas from the Middle East. The disruption has slowed or halted production and transportation, pushing up crude oil prices, which directly affect pump prices. Before the war started on February 28, gas in the US averaged $2.98 per gallon, while diesel cost $3.76.
The increase in diesel prices is particularly concerning because it is a primary fuel for transporting goods. Analysts warn that higher diesel costs could feed into rising food prices and broader inflationary pressures. AAA also cited strong demand from the spring break season as a contributing factor to the recent rise in gasoline costs.
The $4.02 average is the highest since August 2022. Some states have already been seeing prices above this level. While these prices remain below the record highs of $5.01 for gasoline and $5.81 for diesel, set in June 2022 following Russia’s invasion of Ukraine, the impact on household budgets may be more significant this time. Ratings agency Moody’s noted that weaker wage growth and a softer job market could limit consumers’ ability to absorb the higher costs.
Moody’s analysts said that if the Iran conflict is contained quickly, the effect on consumer confidence might be temporary. A prolonged crisis, however, could trigger more precautionary saving and further reductions in discretionary spending.
Rising energy prices are affecting not just the US but countries worldwide. In the United Kingdom, average petrol prices have climbed 14 percent, while diesel is up 27 percent since the conflict began. Some nations, including Sri Lanka and Bangladesh, have introduced fuel rationing, and Slovenia became the first European Union country to implement temporary restrictions.
In Australia, the government has cut fuel sales tax for three months to help motorists manage costs, and two states have offered temporary free public transport to encourage residents to reduce fuel consumption.
The surge in pump prices highlights the global economic ripple effects of geopolitical tensions in the Middle East, as higher wholesale energy costs feed quickly into consumer markets. Analysts warn that unless shipping routes are restored and supply stabilizes, drivers in the US and elsewhere could continue facing record energy bills in the coming months.
