Petrol prices in the US have surged to $4.48 per gallon—a 50% rise since the Iran war began—driven by disruptions in the Strait of Hormuz, which handles a fifth of global crude oil.
The average price of regular gasoline jumped 31 cents last week alone, hitting $4.48 on Tuesday, according to AAA. The conflict has stranded tankers and effectively closed the vital Persian Gulf passage, sparking a global energy crunch.
Mid-April brought optimism as ceasefire talks hinted at de-escalation, sending prices down for nearly two weeks. "After the announcement of the initial ceasefire, there was kind of optimism that this really could be the beginning of the end of the conflict," said Rob Smith, director of global fuel retail at S&P Global Energy. Crude and petrol prices fell in tandem, with retailers passing on savings.
But fighting persisted, reversing the trend. "There’s a fundamental shortfall that will exist globally or fundamental struggle to meet that demand that will drive up prices," Smith added.
Gas station owners set retail prices, influenced by multiple factors. Crude oil accounts for about 51% of a gallon’s cost (per 2025 EIA data), followed by federal/state taxes (17%), refining/profits (14%), and distribution/marketing (17%). In high-tax states like California, averages exceed the national figure.
The Strait's closure triggered oil's largest-ever supply shock, per the International Energy Agency, with benchmarks like WTI hitting $112 per barrel in early April. "Not much of a mystery here. It’s not exactly proportional, but the shape of the curves follows the same pattern, and really with very little delay," said Bob Kleinberg, adjunct senior research scholar at Columbia University's Centre on Global Energy Policy.
A US move in April to block Iranian ports amplified the crisis. "Iran had been moving an unusually high amount of oil to global markets, so that was helping moderate prices," noted Jim Krane, energy fellow at Rice University’s Baker Institute.
Prices swing wildly on news of Gulf attacks or stalled diplomacy. "The oil market is exquisitely sensitive to what’s coming out of the White House," Kleinberg said. Weekly jumps echo past shocks, like 2022's 60-cent spike after Russia's Ukraine invasion.
With Hormuz flows choked, prices exceed early 2022 peaks and could climb further through summer, AAA warns. Even a lasting resolution would take months to unwind. "Even if there was a true and lasting resolution of the conflict, both sides agree to play nice and truly do commit to keeping Hormuz open, it will still take months to get back to what it was pre-war, if not even longer," Smith cautioned.