On Monday, average gas prices in the U.S. surged past the $4 mark per gallon, an unsettling development fueled by the resurgence of the Iran conflict sparking renewed anxieties over potential global oil supply shortages.
According to data from AAA, drivers found themselves paying 13 cents more per gallon than they did a week ago, marking a 3% hike and bringing the average price up to $4.003 per gallon.
This uptick in gas prices echoes the surge seen earlier this year following the onset of the Iran crisis toward the end of February. The escalating Middle Eastern tensions led Iran to close the vital Strait of Hormuz, a crucial passageway that accommodates about 20% of the world’s oil flow, causing a spike in fuel costs. Although a tentative agreement between the U.S. and Iran had briefly pushed prices below $4 last month, fuel costs haven’t crossed this threshold since August 2022, a fallout from Russia’s incursion into Ukraine.
Recent retaliatory attacks between the U.S. and Iran have intensified the conflict, significantly undermining hopes for a diplomatic solution.
In a statement on Sunday, President Donald Trump asserted that U.S. forces delivered a powerful blow to Iran as a response to the tragic loss of U.S. service members over the weekend.
U.S. Central Command said two service members were killed in an attack on Jordan on Friday, and that a third service member remained missing. Another service member was killed in Iraq on Saturday, CENTCOM said.
The U.S. resumed its naval blockade of the Strait of Hormuz last week, reversing a key commitment made as part of the agreement. That move came after Iran fired upon oil tankers in the strait.
The Iran war triggered one of the largest oil shocks ever recorded, sending the national average price of gasoline as high as $4.56 a gallon on May 21, AAA data showed.
Oil and gasoline prices began to fall in late May, however, as Iran and the U.S. appeared willing to strike an agreement that would reopen the strait. By late June, those prices gad fallen fell to their lowest level since before the war began.
Relief at the pump helped bring down prices overall. Inflation dropped more than expected in June as gas prices eased, federal government data on Tuesday showed.
Gas prices rose 3.5% in June compared to a year earlier, marking a retreat from a year-over-year inflation rate of 4.2% in the prior month. The reading for June marked the lowest inflation since March, though the pace of price increases remains more than a percentage point higher than its pre-war level.
Even after easing last month, overall inflation stands markedly higher than the Federal Reserve’s target rate of 2%.
ABC News’ David Brennan contributed to this report.
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