Average gasoline prices in the United States rose above $4 per gallon on Monday, climbing from $3.87 last week. Diesel also increased, reaching $5.10 per gallon from $4.87, according to the American Automobile Association (AAA).
The surge follows renewed conflict affecting the Strait of Hormuz, a critical oil transit route where roughly 20% of global oil consumption passes. This disruption triggered a spike in crude oil prices, with Brent crude briefly exceeding $90 per barrel before easing on signs of ongoing diplomatic efforts from Iran.
Fuel costs had been declining after a June agreement between Washington and Tehran reduced supply disruption concerns, but recent attacks on shipping vessels and U.S. retaliatory actions reversed that trend. A merchant ship near Oman's coast was recently damaged by an unknown projectile, increasing regional tensions as noted by UK Maritime Trade Operations.
Experts warn of further price rises driven by supply shortages partially exacerbated by Ukrainian strikes on Russian oil refineries. Oil analyst Tom Kloza anticipates gasoline prices could increase by 10 to 25 cents per gallon in the coming days.
The rise in fuel expenses is renewing inflation concerns in the U.S., where lower oil prices had helped cool inflation rates. Any escalation threatening additional strategic waterways could amplify inflationary pressures.
Higher fuel costs complicate the political landscape ahead of U.S. midterm elections, especially in states where gas prices have surpassed $5 per gallon, such as California, Washington, and Hawaii. Resolution depends on diplomatic success in deescalating tensions with Iran.
This material is informational and does not constitute financial advice.
