U.S. gas prices hit highest level since war in Iran began

Gasoline costs were already biting into household budgets when the national average for regular fuel reached $4.18 a gallon on April 28, the highest level since the war in the Middle East began and the steepest reading in nearly four years. AAA said the average rose about 7 cents overnight and has climbed roughly $1.20, or about 40%, since the conflict began on February 28.

The increase has landed unevenly across the country. California posted the highest state average at about $5.97 a gallon, while Oklahoma was among the cheapest markets at roughly $3.57 to $3.66. Hawaii, Washington, Oregon, Nevada, Alaska and Arizona were also among the pricier states, a pattern that puts Western drivers closest to the front of the shock. For commuters, delivery fleets and families planning summer road trips, the difference between a gas station in the West and one in the Plains is now large enough to change daily spending decisions.

The latest jump reflects more than one pressure point. Reuters reported that unplanned refinery outages in April totaled about 150,000 barrels per day, compounding the war-related supply shock. Analysts say the bigger concern is the Strait of Hormuz, through which about one-fifth of the world’s oil supply normally moves. Any sustained disruption there could keep fuel prices elevated for months, even if the conflict cools, because crude markets and refined fuel supplies would remain vulnerable to bottlenecks.

The price surge also adds a new layer of inflation risk at a time when consumers are already sensitive to food, housing and borrowing costs. AAA had already shown the national average at $4.16 on April 9, then at the highest level since early August 2022. By April 29, it had climbed again to $4.229, signaling that the pressure had not eased. Economists warn that if energy costs stay high, the ripple could spread from gas stations into shipping costs, commuting bills and the price of summer travel before the season is over.