U.S. gas prices surged to $4.43 per gallon, up 61% since December, as oil briefly hit $126 a barrel on Thursday, its highest level since the Iran war began.
According to The Kobeissi Letter, Americans will spend roughly $90 billion more on gasoline in a year than they would at $3/gallon.
Iran Escalation Fears Rattle Oil Markets
President Donald Trump on Saturday said he was reviewing a new Iranian proposal while nuclear talks remained stalled, after rejecting Tehran's earlier offer on Friday as failing to meet U.S. demands, leaving the status of the Strait of Hormuz and potential global energy supply disruptions unresolved.
Baker Hughes Co. (NASDAQ:BKR) CFO Ahmed Moghal warned the Strait may stay shut through the second half of 2026, with nearly 80% of oil executives surveyed by the Dallas Fed agreeing.
AAA data shows California’s regular gas average hit $6.088/gallon as of Saturday, approaching its all-time high of $6.438 set in June 2022, while diesel reached $7.508/gallon below its peak of $7.747/gal in April 2026.
The Federal Reserve this week kept rates unchanged while flagging that “inflation is elevated,” directly referencing the surge in global energy prices.
RSM Chief Economist Joseph Brusuelas earlier warned that a Fed rate hike, rather than a cut, could come as soon as June, given the supply shock and the likelihood that the war will not be resolved soon.
Travel Industry Also At Risk
GasBuddy's Patrick De Haan also warned that if the Strait of Hormuz remains closed, "Americans will start changing their summer travel plans," which could negatively impact airlines, cruise lines and online travel stocks.
The warning appears plausible, as Spirit Airlines' (OTC:FLYYQ) CEO said surging jet fuel costs driven by the Iran conflict undermined the airline's recovery plan, though Transportation Secretary Sean Duffy said Spirit Airlines' struggles were "self-made."
Photo Courtesy: Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Login to comment