US oil prices are hovering near multi-year highs as the Iran conflict drags into its third week, with energy analyst Patrick De Haan forecasting that pump prices could reach $3.85 per gallon on Monday. The prospect of $4 gasoline remains real, though De Haan notes it is not imminent. The ongoing military campaign has created one of the most challenging environments for US energy consumers in years.
The US-Israel campaign against Iran, which began on February 28, has systematically disrupted the region’s oil production and export infrastructure over three weeks. The national gasoline average has surged 23% from below $3 per gallon to $3.70, leaving millions of Americans paying significantly more to fill their tanks. The pace of the price increase has drawn comparisons to previous oil crises in American history.
US forces struck Kharg Island on Friday, a key facility in Iran’s petroleum export network, ratcheting up the pressure on global supply. Iran’s retaliatory blockade of the Strait of Hormuz, responsible for approximately one-fifth of global oil flows, has compounded the supply shortage. Brent crude hovered between $103 and $106 per barrel Monday, and US crude settled at $94 after briefly surging to $100 the previous day.
California has emerged as ground zero for the domestic price crisis, with state averages above $5 per gallon and some Los Angeles stations charging in excess of $8. Diesel costs for commercial transportation could hit $5.15 per gallon nationally. The leaders of Exxon, Chevron, and ConocoPhillips have all communicated supply concerns to White House officials, with Exxon’s Darren Woods highlighting the risk that market speculation could drive prices even higher.
Wall Street opened cautiously optimistic Monday, with the S&P 500 gaining approximately 1% following a brief oil price retreat. Major oil company stocks have reached all-time highs since the war began, reflecting investor confidence in sustained elevated prices. The contrast between surging oil stock valuations and rising consumer fuel costs highlights the deeply unequal economic impact of the ongoing conflict.