Gas Prices Surpass $4 Per Gallon as Trump Eyes Hormuz Retreat

In the month since the United States and Israel launched strikes on Iran, the national average price of a gallon of regular gasoline spiked more than a dollar, hitting $4.02 on Tuesday, the first time in more than three years that threshold had been crossed, according to AAA.

The mechanism is unrelenting and sequential. The war in Iran has essentially shut off oil tanker traffic through the Strait of Hormuz. Roughly 20 percent of the world's oil and natural gas normally passes through the strait. Amid fears of prolonged supply shortages, Brent crude surpassed $100 per barrel on March 8 for the first time in four years, rising to a peak of $126 per barrel. Leading maritime insurers dropped war-risk coverage for vessels operating in the Persian Gulf. War-risk ship insurance premiums for the strait jumped from 0.125 percent to between 0.2 and 0.4 percent of a vessel's insured value per transit, an increase of roughly a quarter of a million dollars for very large oil tankers. Those costs flow directly into what refiners pay to secure crude. Beyond retail gasoline, diesel used to power freight trucks, farm equipment, and public transit climbed to $5.45 per gallon, more than $1.80 above year-ago levels.

Now the White House is adding a new layer of uncertainty to an already fractured market. President Donald Trump indicated he could step back from efforts to force Iran to reopen the strait. In terms that traders parsed as a retreat from active U.S. engagement, Trump told CBS News: "If they're having a hard time getting oil, let them come and take it like they're supposed to. Let them come up and take it. They didn't want to give a hand to anybody. NATO is terrible, and they're all terrible. So if they want oil, come up and grab it. There's no real threat, there's no substantial threat because the country [Iran] has been decimated." He added: "It's about time they did something for themselves."

What that posture means in market terms is consequential. The principal military force capable of deterring Iranian interdiction of commercial shipping would reduce pressure at the exact moment tankers are deciding whether to risk a transit. Without a credible reopening push, the risk premium embedded in crude futures stays elevated, refiners absorb higher input costs, and drivers see the result above the pump island.

White House press secretary Karoline Leavitt insisted relief is coming, telling CBS News: "When Operation Epic Fury is complete, gas prices will plummet back to the multi-year lows American drivers enjoyed before these short-term disruptions." Trump said prices would drop "when we leave" after the war ends, claimed the operation is "two weeks ahead of schedule," and said simply, "It won't be long."

The schedule invites scrutiny. When the conflict began, Trump projected it would last four to six weeks. The war is now in its fifth week. Secretary of War Pete Hegseth and Chairman of the Joint Chiefs of Staff Air Force Gen. Dan Caine held a Pentagon briefing on Operation Epic Fury, with Hegseth declaring the "upcoming days will be decisive," a phrase that did little to clarify when the market disruptions might end.

Trump dismissed concerns about Iran's staying power: "They have no military might anymore. They are down on everything they had. They're a mess." Energy markets, watching a closed 21-mile waterway rather than the rhetoric, are pricing accordingly.