US oil prices are surging again as the Iran war continues into its third week, with critical global energy infrastructure under sustained attack and key shipping lanes blocked. Petroleum analyst Patrick De Haan forecasts pump prices reaching $3.85 per gallon Monday, while maintaining that $4 gasoline remains a near-term possibility. The combination of infrastructure strikes and shipping blockades has created one of the most severe energy supply crises in recent memory.
The conflict began on February 28 with the first US-Israeli strikes on Iran, setting off a chain of events that has pushed the national gasoline average from below $3 to $3.70, a 23% increase in under three weeks. The targeted destruction of oil processing facilities and the shutdown of key maritime routes have combined to restrict global oil supply in ways that are directly impacting prices at American gas stations. The pace of the price increase has concerned consumer advocacy groups and economic analysts alike.
Friday’s strike on Kharg Island by US forces was a major escalation, targeting the facility most critical to Iran’s oil export capacity. Iran’s blockade of the Strait of Hormuz, which normally handles around 20% of the world’s daily oil supply, has removed a significant volume of petroleum from global markets. Brent crude moved between $103 and $106 per barrel Monday, while US crude held near $94 after briefly spiking to $100 on Sunday.
In California, pump prices have exceeded $5 per gallon statewide, with some Los Angeles stations posting prices above $8. Commercial users of diesel fuel in the trucking and rail industries face potential costs of $5.05 to $5.15 per gallon across the nation. Oil company executives from Exxon, Conoco, and Chevron have all met with White House officials to flag the growing supply risk, with Exxon’s CEO Darren Woods particularly vocal about the potential for speculative trading to worsen the situation.
US equity markets opened positively Monday, with the S&P 500 gaining around 1% as crude prices briefly retreated. Oil company shares have reached historic highs since the conflict began, benefiting from the same elevated prices that are squeezing American households. A sustainable improvement in the energy price outlook will require either a reopening of the Strait of Hormuz or a cessation of military operations in Iran.