Pump prices surge as supply routes tighten
Gasoline prices in the United States rose again on Wednesday as the Iran war continued to disrupt energy infrastructure in the Middle East and slow shipping through the Strait of Hormuz. Drivers are now paying an average of $3.84 per gallon, up from $2.92 a month ago and the highest level since September 2023, according to AAA.
Diesel prices have climbed even faster, reflecting pressure on global supply. On Tuesday, the national average topped $5 per gallon for the first time since 2022. In California, Hawaii, and Washington, diesel has moved beyond $6 per gallon, based on AAA figures.
Brent pushes above $111 as crude drives the cost of gas
Crude oil is the largest component of what motorists pay at the pump, accounting for about 51% of the cost of a gallon of gas in the US. That link is showing up quickly as benchmarks move higher.
Brent crude, the global benchmark, rose from roughly $70 per barrel ahead of the February 28 US and Israeli strikes on Iran to as high as $111.45 on Wednesday afternoon. US benchmark crude climbed to about $99.24.
Price swings have been amplified by supply chain disruptions and production constraints across the region. Iran also issued fresh threats on Wednesday, warning it could target oil and gas infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates after saying some of its own gas assets were hit.
Markets weigh escalation risk while watching for follow-through
Energy analysts say traders are still trying to judge whether threats become actions and how quickly any retaliation would feed into oil pricing. Patrick De Haan of GasBuddy said markets may hesitate to fully price worst-case scenarios until there is clearer evidence of what comes next and how the United States might respond.
White House Jones Act waiver seen as limited relief
The White House has moved to reduce near-term pressure, including a 60-day waiver of the Jones Act, which typically requires shipments between US ports to use US-built, US-flagged, and US-crewed vessels. The aim is to ease domestic transport constraints, particularly for fuel movements.
Still, De Haan described the waiver as a limited measure that is unlikely to materially pull down pump prices if the market remains focused on risks in the Strait of Hormuz. With crude still elevated, drivers may see price declines only if shipping conditions stabilize and the broader risk premium in oil fades.
