The war with Iran has sent shockwaves through global energy markets, pushing oil prices sharply higher and leaving American drivers paying the most for gasoline in nearly two and a half years.

New data from AAA shows that the national average price for a gallon of regular gas climbed to $3.79 on Tuesday, a steep increase from $2.98 before the United States and Israel began coordinated strikes against Iran on Feb. 28. Prices have now reached levels not seen since October 2023.

Consumers across the country are already feeling the impact.

“It’s pretty hard. I mean, times are tough for everybody right now,” Amanda Acosta, a Louisiana resident, told The Associated Press while filling up her car’s tank this week.

“I’m getting way less gas and paying way more money.”

Her frustration reflects a broader trend, as higher fuel costs have become one of the most immediate economic consequences of the conflict. The price of crude oil, which is the key component in gasoline, has jumped and fluctuated significantly in recent weeks due to disrupted supply chains and reduced output from major Middle Eastern producers.

Brent crude, the global benchmark, surpassed $102 per barrel on Tuesday, up sharply from about $70 just weeks earlier. U.S. benchmark crude has also surged, approaching $96 per barrel.

Attention has increasingly turned to Washington. Before the outbreak of the war, President Donald Trump had touted his record of keeping gas prices down. Since then, however, he has shifted his messaging, suggesting that higher oil prices benefit the United States.

In a social media post last week, Trump wrote that because America is now the world’s leading oil producer, “when oil prices go up, we make a lot of money.”

While energy companies stand to gain from rising prices, consumers are left shouldering the burden. The latest spike comes at a time when many households are already grappling with elevated living costs.

Economists warn that higher fuel prices could also feed into persistent inflation, at least in the near term, and potentially weigh more heavily on the broader economy if the trend continues. That, in turn, could increase pressure on the Trump administration as voters remain focused on affordability.

“I just want all of it to end. I just want to get out of there, out of Iran,” said Meghan Adamoli, a New Jersey resident who was among customers filling up at a Multani station on Tuesday.

Adamoli added that while she personally can manage the rising costs, she recognizes that many others are struggling far more.

Truck driver Dan Bradley of Pennsylvania said the increases have hit both his business and personal expenses. Alongside gasoline, diesel prices have also climbed significantly, with the national average exceeding $5 per gallon on Tuesday, up from about $3.76 before the war began.

“It sucks when you’re filling up,” said Bradley. “What are you going to do, not get gas?”

Not everyone views the surge negatively. Clay Plant, who lives in Lubbock, Texas, said higher oil prices are boosting economic activity in his area, where drilling has ramped up.

“It’s kind of a good sign for us in west Texas,” Plant said. “I look at it as my friends and family get to eat and they get to go to work.”

Although the United States has become a net exporter of oil, global pricing dynamics still affect domestic costs. Regions that rely heavily on Middle Eastern imports, particularly in Asia, have been hit even harder by the disruption, but Americans are not insulated from rising prices.

Oil is traded on a global market, and much of the crude produced in the U.S. differs from what domestic refineries are optimized to process. As a result, the country continues to rely in part on imports, leaving it exposed to international supply shocks.

The outlook remains uncertain, with the potential for further price increases if the conflict continues. Iran has effectively shut down most tanker traffic through the Strait of Hormuz, a critical chokepoint that normally carries about 20% of the world’s oil supply.

This disruption has forced some regional producers to scale back output, as their oil cannot reach global markets. At the same time, strikes by Iran, Israel, and the United States have targeted key energy infrastructure.

These developments have triggered a scramble among nations to secure alternative supplies.

In response, the International Energy Agency announced plans to release 400 million barrels of oil from member countries’ reserves.

After previously minimizing the need to draw from emergency reserves, Trump confirmed that the U.S. would contribute 172 million barrels from the Strategic Petroleum Reserve as part of the coordinated effort.

The administration also said it would temporarily allow Russian oil to re-enter global markets despite existing sanctions tied to the war in Ukraine.

Still, analysts caution that these measures offer only temporary relief. Because refineries purchase crude in advance, it takes time for additional supply to filter through to consumers.

While crude oil prices are the primary driver of current increases, seasonal factors are also playing a role.

Gas prices often rise this time of year as travel increases and refineries switch to producing a more expensive summer fuel blend.

Regional differences also remain significant. On Tuesday, California posted the highest average price at more than $5.54 per gallon, while Kansas had the lowest at around $3.21.

Experts warn that sustained increases in fuel costs could ripple through the broader economy.

As households spend more on essentials like gasoline, many—especially those with lower or middle incomes—will need to cut back in other areas, said Francesco D’Acunto, a finance professor at Georgetown University.

Higher transportation costs also affect the price of goods and services, from food delivery to utility bills.

The combination of inflationary pressure and uncertainty tied to wartime conditions can also dampen consumer confidence.

These conditions, D’Acunto noted, may lead people to delay major financial decisions such as purchasing a home or vehicle.

“So potentially even that will have such an effect on the overall economy.”

{Matzav.com}