How Much Could Gas Prices Rise? Key Facts on the Continuing Effects of the Iran Conflict

(SeaPRwire) –   The conflict between the Trump administration and Iran has placed a significant financial burden on Americans, reaching a critical turning point in the final days of March.

Data from the American Automobile Association and the tracking service GasBuddy indicate that the national average for a gallon of gasoline has surpassed $4 for the first time since the 2022 Russian invasion of Ukraine.

This represents a climb of over $1 compared to the costs recorded just before the hostilities commenced on February 28.

Why gas prices have crossed $4 per gallon

The price spike is fueled by rising global oil costs linked to the conflict, which has jeopardized supply chains and sparked concerns regarding potential disruptions to vital transit corridors, such as the Strait of Hormuz.

Patrick De Haan, who leads petroleum analysis at GasBuddy, cautioned that hitting a $4 national average represents the crossing of a “psychological wall.”

In a recent note, WisdomTree senior economist Jeremy Siegel observed that because gasoline is the most visible expense for consumers, sudden price hikes have an immediate impact on public sentiment.

While the Trump administration has sought to emphasize economic affordability ahead of the upcoming midterms, the war has further strained an already fragile U.S. economy. Beyond threatening global energy supplies, the conflict is disrupting food production, travel, and shipping logistics, increasing the risk of a U.S. recession.

With no immediate resolution in sight despite ongoing diplomatic efforts, fuel prices may continue to climb, particularly if the Strait of Hormuz—a route for roughly 20% of the world’s oil—remains compromised.

“The situation remains highly volatile and unpredictable,” De Haan noted in a March 30 blog post.

How much gas prices have risen since the Iran war began

GasBuddy reports that gas prices have jumped $1.04 from last month’s $2.97 average. AAA figures show a similar trend, rising from $2.98 on February 26 to $3.98 on March 26, and reaching $4.02 by March 31. Increased demand during the spring break season has further contributed to the upward pressure on prices.

Costs are even higher on the West Coast; California saw an average of $5.87 per gallon on March 31. Factors such as state-mandated fuel blends, limited infrastructure, and elevated gas taxes exacerbate these costs. Energy economist Philip Verleger noted in a report cited by Reuters that the U.S. West Coast is becoming a “poster child for the consequences of the attacks on Iran.”

Why diesel prices are surging and what it means for consumers

According to AAA, diesel—a fuel essential to agriculture, shipping, construction, and transportation—reached $5.45 on Tuesday, marking a 45% increase since the war began. RSM US chief economist Joe Brusuelas suggested to Bloomberg that a 10% rise in diesel costs could elevate the headline consumer price index by 0.1% due to supply chain impacts.

Although the U.S. is a major oil producer, domestic fuel prices remain tethered to global crude markets, with diesel costs heavily influenced by international benchmarks, according to the U.S. Energy Information Administration. Additional factors like refining, distribution, and taxes also play a role.

To counter the impact at the pump, the administration announced in early March that the Department of Energy would release 172 million barrels from the Strategic Petroleum Reserve, a process expected to take roughly 120 days.

Additionally, the administration has suspended the Jones Act for 60 days to allow foreign vessels to transport goods between U.S. ports, and has authorized the sale of higher-ethanol gasoline blends—typically restricted during summer months due to smog concerns—in an effort to lower costs.

How high gas prices could rise from here

Analysts suggest that pump prices are likely to continue their upward trajectory. Phil Flynn, a senior market analyst at Price Futures Group, told Fox Business that further increases are expected, noting the typical lag between crude oil price shifts and consumer costs at the pump.

Robert Yawger of Mizuho Securities previously told the Wall Street Journal that a $10 increase in crude oil per barrel can raise gas prices by 10–15 cents, while BloombergNEF estimates that such an increase could drive prices up by 30–40 cents amid current tensions.

De Haan stated in his March 30 blog that if current conditions persist, the national average will likely continue to climb beyond $4. He added that diesel could reach $6 per gallon and potentially hit record highs if the situation does not improve.

Macquarie Group strategists have warned that if the conflict persists into the summer, oil could reach $200 per barrel, potentially pushing gas prices to $7 per gallon. They assign a 40% probability to this outcome, while a 60% likelihood is given to a scenario where the conflict ends this month, allowing oil prices to retreat, though they would likely remain above pre-war levels.

“Prices go up like rockets, and they come down like a feather,” remarked Michael Mische, a supply chain expert at the University of Southern California, in an interview with Fox Business.

Analysts speaking to Reuters also noted that damage to the Iranian oil hub at Kharg Island could push Brent crude to $120 per barrel, with some projections reaching as high as $200.

In its March 2026 short-term outlook, the Energy Information Administration projected that Brent crude would stay above $95 per barrel for two months before dropping below $80 in the third quarter and ending the year near $70.

The EIA also forecast an annual average retail gas price of $3.34 for 2026, noting that crude prices could keep retail gas roughly 60 cents higher in March and 70 cents higher in the second quarter, before potentially falling toward $3 by year-end. However, these projections rely on assumptions that oil production disruptions will peak in early April and that transit through the Strait of Hormuz will stabilize, both of which remain uncertain.