Gas Prices Surge Past $3.70 as Iran War Disrupts Global Oil Supply

Americans are paying nearly a dollar more per gallon at the pump than they were a month ago, and the price increases show no signs of stopping as long as the Iran war continues to disrupt global oil supplies. The economic ripple effects extend far beyond the gas station—higher fuel costs are feeding into food prices, shipping costs, and consumer confidence.

The Numbers

U.S. gasoline prices are averaging $3.72 per gallon nationally, up nearly 80 cents from a month ago, according to CBS News. Diesel prices have increased even more dramatically—up $1.34 per gallon to just under $5.00, putting pressure on the trucking industry that moves 72 percent of American freight.

Global crude oil prices spiked to nearly $120 per barrel about a week after the war began before settling around $100, where they have hovered for the past two weeks, according to NPR. Before the conflict, oil was closer to $70 per barrel—a 43 percent increase that is still working its way through the economy.

Experts at Northeastern University predict the increases are not over. According to their analysis, higher gas prices and broader inflation are expected as long as the conflict continues and Strait of Hormuz shipping remains restricted.

Why Prices Spiked So Fast

The Strait of Hormuz is the chokepoint. Approximately 20 percent of the world’s oil traffic normally passes through this narrow waterway between Iran and Oman. Since the war began, ship traffic through the Strait has declined sharply due to attacks on oil infrastructure by both sides, according to Al Jazeera.

The disruption is the worst to global oil supplies in decades. While the U.S. is a major oil producer and less dependent on Middle Eastern oil than it was 20 years ago, oil is a global commodity—disruptions anywhere affect prices everywhere. When 20 percent of global supply faces shipping risks, every barrel in the world becomes more expensive.

Trump has demanded that Iran reopen the Strait and has threatened strikes on the South Pars gas field—one of the largest natural gas fields in the world—if they do not comply, according to NBC News. This threat caused another spike in energy prices, as markets factored in the possibility of even greater supply disruption.

The Broader Economic Impact

Higher diesel prices affect the cost of essentially everything, according to the Center for American Progress. Diesel powers the trucks, ships, and trains that move goods across America. When diesel costs $5 per gallon instead of $3.50, those increased transportation costs get passed to consumers in the form of higher prices at grocery stores, retail outlets, and restaurants.

The war’s economic impact extends beyond fuel. According to NBC News, the conflict is already affecting mortgage rates and the stock market. The S&P 500 has declined in four consecutive weeks, with JPMorgan cutting its 2026 target for the index to 7,200 from its previous forecast.

Consumer confidence is eroding. When gas prices rise visibly—displayed in large numbers at every street corner—it shapes public perception of the economy regardless of what other indicators show. The psychological impact of paying $50 to fill a tank that cost $35 a month ago is immediate and visceral.

What to Expect Next

The trajectory of gas prices depends almost entirely on the military and diplomatic situation in the Middle East. Three scenarios are in play:

Best case: A ceasefire agreement reopens the Strait of Hormuz, oil prices gradually return to the $75-85 range, and gas prices stabilize around $3.00-3.20 by summer. This requires successful negotiations, which remain uncertain.

Status quo: The conflict continues at reduced intensity with partial Strait disruption. Oil stays around $95-105, gas prices hover between $3.50-4.00 through the summer, and the broader inflationary impact mounts.

Escalation: Strikes on the South Pars gas field or a full Strait closure push oil past $130. Gas exceeds $4.50 nationally, diesel approaches $6.00, and a recession becomes likely. This is the scenario markets fear most.

According to PBS News, consumers can take limited defensive steps: combine errands to reduce trips, use gas price comparison apps to find the cheapest stations, maintain proper tire pressure for fuel efficiency, and consider public transportation where available. But these are marginal savings against a macroeconomic force that individual consumers cannot control.

The next five days—Trump’s extended deadline for Iran on the Strait of Hormuz—will likely determine whether prices stabilize or continue climbing.

Sources

1. CBS News — Gas Prices Surge Amid Iran War — accessed March 26, 2026
2. NPR — Oil Prices Surge as Iran War Continues — accessed March 26, 2026
3. Al Jazeera — Why the Oil Price Shock Won’t Fade Away — accessed March 26, 2026
4. Center for American Progress — The War in Iran Will Raise Fuel Prices — accessed March 26, 2026