With the Iran war now in its third week, US oil prices remain under intense pressure, and analysts are warning that Monday could see another round of sharp increases at the pump. Patrick De Haan, a prominent petroleum analyst, has forecast average gasoline prices of $3.80 to $3.85 per gallon, with the $4 mark remaining a real possibility. Three weeks of military conflict have fundamentally altered the short-term energy outlook for American consumers.
The trigger for the current energy crisis was the February 28 commencement of US and Israeli strikes on Iran, which immediately unsettled global oil markets. From a pre-war national average below $3 per gallon, US gasoline prices have surged 23% to reach $3.70. The sustained nature of the price increase has made this one of the more significant energy shocks in recent US consumer history.
The US strike on Kharg Island last Friday, which targeted a key Iranian oil processing facility, tightened global supply further. Iran’s continued closure of the Strait of Hormuz—responsible for moving roughly a fifth of the world’s oil—has amplified the supply crunch. Brent crude was trading between $103 and $106 per barrel Monday, while US crude dipped to $94 after touching $100 the previous day.
Regional disparities in price impacts are significant, with California averaging over $5 per gallon and Los Angeles stations in some neighborhoods charging above $8. Diesel, the lifeblood of American freight transport, may reach $5.15 per gallon at the national level. Top oil industry executives, including Exxon’s Darren Woods, and leaders from Conoco and Chevron, have met with White House officials to warn of deepening supply pressures and the threat of speculative price bubbles.
The US equity market opened higher Monday, with the S&P 500 gaining roughly 1% following temporary relief from oil price pressures. However, the gains remain fragile given the uncertain military situation. Oil company stocks have reached all-time highs overall since the conflict began, underscoring the financial paradox of a crisis that enriches energy producers while burdening ordinary consumers.