Washington, May 7, 2026 — Fuel prices in the United States have jumped dramatically following the ongoing conflict involving Iran, with regular gasoline prices increasing by 52 percent compared to levels before the war began.
According to data from the American Automobile Association (AAA), the average price of regular gasoline rose by 31 cents per gallon over the past week, reaching $4.54 per gallon on Wednesday. Analysts say the sharp increase is largely linked to disruptions in the Strait of Hormuz, one of the world’s most critical oil transit routes.
Nearly one-fifth of the world’s crude oil supply normally passes through the narrow waterway. However, military tensions and shipping disruptions near the strait have severely affected oil transportation, causing global crude prices to surge over the past two months.
Energy experts said hopes of a temporary easing of tensions in mid-April had briefly lowered fuel prices in the US. Retail gasoline prices declined for two consecutive weeks after early signs of a possible ceasefire emerged.
Rob Smith, Global Fuel Retail Director at S&P Global Energy, said optimism surrounding preliminary ceasefire discussions had initially calmed oil markets.
“There was hope that the conflict might be approaching a resolution, which caused crude oil prices to decline temporarily,” Smith said. “That led fuel retailers to lower gasoline prices in response.”
However, renewed hostility between Washington and Tehran over access to the Strait of Hormuz has once again disrupted supply chains, reversing the downward trend in fuel prices.
Smith warned that the global market is now facing a fundamental supply shortage.
“No matter what governments or market analysts say, as long as the Strait of Hormuz remains obstructed, there will continue to be strong upward pressure on oil prices every single day,” he added.
How Fuel Prices Are Determined in the US
Gasoline prices in the United States are set mainly by gas station operators, but crude oil costs remain the largest factor behind retail pricing.
The US Energy Information Administration says crude oil accounted for approximately 51 percent of the average gasoline price in 2025.
Historically, higher global crude oil prices lead directly to increased gasoline prices. When oil supply declines, both crude oil and refined fuel products become more expensive.
The International Energy Agency (IEA) described the current supply disruption linked to the Hormuz crisis as one of the largest oil supply shocks in modern history. Earlier in April, crude oil prices climbed as high as $112 per barrel before later dropping below $100 amid renewed diplomatic efforts.
US Measures Against Iran Intensify Market Pressure
Analysts also point to recent US actions targeting Iran’s oil exports as a major reason behind the price surge.
Last April, Washington imposed restrictions aimed at preventing Iran from exporting oil through its ports. Jim Krane, an energy research fellow at Rice University’s Baker Institute, said Iran had been supplying unusually large amounts of oil to global markets, helping stabilize prices before the restrictions were imposed.
“The Trump administration moved to block Iranian oil exports to increase pressure on Tehran,” Krane said. “That decision not only affected Iran but also tightened global supply and pushed prices higher.”
Oil markets have since become highly sensitive to developments in the Persian Gulf. Reports of attacks on vessels or stalled diplomatic talks have repeatedly triggered price volatility.
No Quick Solution in Sight
Experts caution that fuel prices may remain elevated for months, even if a permanent ceasefire is eventually reached.
Shipping companies and insurers continue to factor in major security risks while operating near the Strait of Hormuz, creating additional transportation and insurance costs that are expected to keep oil prices high.
Despite being a net oil exporter, the United States cannot fully shield itself from global price shocks because oil is traded on international markets. Industry groups also note that most US refineries are designed to process heavy, high-sulfur crude oil, while much of America’s domestic production consists of lighter shale oil.
Converting US refineries to process more domestic crude would require billions of dollars in investment and temporary refinery shutdowns — steps that could further raise fuel prices in the short term.
