The ongoing US-Israel military campaign against Iran is keeping US oil prices in a state of constant flux, with analysts warning that Monday could bring yet another round of sharp swings. Patrick De Haan, a widely respected petroleum analyst, projects that US drivers could pay between $3.80 and $3.85 per gallon by Monday, with $4 remaining a near-term risk. Three weeks of sustained conflict have made stable energy prices a distant memory for American consumers.
The price spiral can be traced directly to February 28, when coordinated strikes on Iran by the US and Israel first unsettled global oil markets. From below $3 per gallon before the war began, the national gasoline average has now risen to $3.70, a 23% jump in under three weeks. That pace of increase has raised alarm among consumer advocacy groups and transportation industry leaders alike.
Last Friday’s strikes on Kharg Island, one of Iran’s most strategically important oil facilities, added fresh pressure to an already strained global supply picture. Tehran’s ongoing blockade of the Strait of Hormuz has kept a fifth of the world’s oil off markets, with no clear end in sight. Brent crude reached $106 early Monday before dipping to $103, while US crude was trading at $94 after coming close to $100 over the weekend.
Regionally, the impact has been most acute in California, where average gasoline prices have broken through $5 per gallon and some Los Angeles stations are listing prices above $8. Diesel users in the trucking and logistics sector face potential prices of $5.05 to $5.15 nationally. Executives from top US oil companies including Exxon, Chevron, and ConocoPhillips have met with White House officials to voice concerns about supply chain risks and the potential for speculative price inflation.
Wall Street showed some signs of steadying Monday morning, with the S&P 500 edging up about 1% following a minor cooling in oil prices. Whether that stability holds will depend heavily on news from the Strait of Hormuz and from military operations in Iran. Oil sector stocks have climbed to record levels since hostilities began, even as millions of American households struggle with rising fuel costs.