U.S. Gas Prices Hit 18-Month High as Iran War Disrupts Global Oil Supply

TLDR

• U.S. average gas price hit $3.54 per gallon on March 10, the highest since mid-2024
• Prices are up 21% from a month ago and 50+ cents since the U.S.-Iran war began Feb. 28
• The Strait of Hormuz, carrying 20% of global oil, remains effectively closed
• Crude oil swung from nearly $120 to around $84–$85 per barrel within days
• Analysts say gas prices are unlikely to return to pre-war levels due to seasonal demand

U.S. drivers are now paying the most for gas in over 18 months. The national average hit $3.54 per gallon on March 10, according to AAA — up 21% from just one month ago.

The surge is tied directly to the U.S.-Iran war, which began on February 28 when the U.S. and Israel launched strikes on Iran. The conflict disrupted the Strait of Hormuz, a narrow waterway that carries about 20% of the world’s oil supply.

GasBuddy data shows the average price was $2.98 per gallon the day before the war started. That means drivers are now paying more than 50 cents extra every time they fill up.

Last week’s three-day price jump was the largest since Hurricane Katrina in 2005, according to analysis from Bespoke Investment Group.

Crude oil prices have been extremely volatile. Brent crude surged to nearly $120 a barrel early Monday before falling back to around $85 after President Trump said the war could end “very soon.” West Texas Intermediate rose roughly 25% since the end of February.

Why Gas Prices Are Staying High

Even though crude has dropped, gas prices aren’t following — at least not yet. GasBuddy analyst Patrick De Haan says prices are likely to stall between $3.55 and $3.65 per gallon in the next 24 to 36 hours.

There are two reasons prices are sticky. First, retailers don’t immediately pass lower crude costs to drivers. Second, seasonal demand is rising as spring break begins and warmer weather brings more cars to the road.

Gas stations are also required to switch to more expensive summer-blend gasoline, sold from June 1 to September 15. That blend typically adds about 15 cents per gallon for consumers.

De Haan said prices will stay elevated as long as the Strait of Hormuz remains closed. Iran threatened last week to set tankers ablaze, and Bloomberg’s tracker showed the strait remained largely closed as of Tuesday.

What Comes Next

Raymond James analyst Bobby Griffin said if crude stabilizes, gas sellers will see margin pressure for a few weeks before prices settle.

Iran’s foreign minister said Tuesday the country was prepared to keep fighting and ruled out talks with the U.S.

The Strait of Hormuz remained effectively closed as of March 10, with the exception of some Iran-linked vessel traffic.

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