U.S. gas prices jump nearly 30 cents, could top $5 in Midwest

Drivers from the Iran war to a brief outage at BP’s Whiting refinery sent the U.S. average for regular gasoline to $4.446 a gallon Sunday, a nearly 30-cent weekly jump that is tightening household budgets and lifting the odds of $5 gas in parts of the country.

The American Automobile Association said the national average rose from $4.099 a week earlier and was $1.12 higher than the same date last year. That put prices at their highest level in four years, not seen since late July 2022, after a winter and spring that had kept many drivers below this level.

The speed of the run-up reflects geopolitics as much as market mechanics. NPR reported U.S. gas prices were $2.98 on February 26, two days before the Iran war began, underscoring how quickly the conflict changed the pricing environment. AAA also tied the surge to oil prices above $100 a barrel and to the uncertainty around the Strait of Hormuz, a chokepoint that helps move global crude supply.

Refining problems have made the spike sharper in the Midwest. BP’s Whiting refinery in northwest Indiana, one of the region’s biggest fuel plants with a reported capacity of 440,000 barrels per day, suffered a brief power outage that shut down one processing unit. Patrick De Haan of GasBuddy said the outage and the wholesale panic that followed could push gasoline above $5 a gallon in Indiana, Illinois, Michigan and Ohio.

The market was already running lean. The U.S. Energy Information Administration said in its weekly petroleum report for the week ending April 24 that refineries operated at 89.6% of operable capacity, gasoline production averaged 9.8 million barrels a day, and gasoline stocks fell by 6.1 million barrels to 222.3 million barrels. Those figures left less cushion when crude costs jumped and the Whiting outage hit.

Regional prices are diverging fast. California’s average reached $5.78 a gallon on April 27 in one report, and some AAA-related reporting put it at $6.01, keeping the state well above the national average. In the Midwest, the average was reported at $3.88 on April 27 before the latest spike, leaving Wisconsin lower than nearby states, at about $4.29, even as Indiana, Illinois, Michigan and Ohio faced the strongest risk of crossing the $5 mark.

The pattern is familiar: a geopolitical shock raises crude, a refinery outage narrows fuel supply, and low inventories amplify the move at the pump. With crude still elevated and the Strait of Hormuz unresolved, the pressure on drivers is likely to stay uneven, but for the Midwest the next threshold now looks uncomfortably close.