Oil prices surged sharply following U.S.-Israel military strikes on Iran, triggering immediate increases in gasoline prices and raising concerns about broader inflationary pressure tied to global energy markets.
As of Monday afternoon, global benchmark Brent crude traded near $77 per barrel — up from roughly $71 a week earlier and about $66 a month ago. The spike reflects heightened geopolitical risk in the Middle East, a region central to global oil supply chains.
At the consumer level, the national average gasoline price climbed to approximately $3 per gallon, marking a 6-cent increase from the previous week and 12 cents higher than a month ago. Energy analysts warn that additional price hikes are likely in the coming weeks, particularly as seasonal demand strengthens during the spring driving period.
Patrick De Haan, head of petroleum analysis at GasBuddy, said he expects gas prices to rise between 10 and 15 cents over the course of the next week or two. He further projected that “by the time prices peak, they could be 25 to 40 cents higher than today.”
Tom Kloza, chief oil analyst for Gulf Oil, estimated that gas prices could peak at between $3.25 and $3.50 per gallon this spring — slightly above last year’s range of $3.20 to $3.30 per gallon during the same period.
While gasoline prices are rising, analysts say diesel fuel could see even sharper increases — a development that may worsen broader inflation trends due to higher shipping and logistics costs.
“Diesel prices are … probably going to be back around $4 or higher here in the second quarter,” Kloza said. “Those are stunning highs, comparable to what we saw in 2022.”
De Haan similarly said, “Gasoline prices are going to go up, but diesel prices are going to go up far more noticeably.”
“Inflation numbers are going to start heating up a bit if diesel is continuing to rally,” he added.
The geopolitical trigger came Saturday when the U.S. and Israel launched strikes against Iran, stating they killed Iranian Supreme Leader Ayatollah Ali Khamenei. The long-term trajectory of the conflict remains uncertain.
President Donald Trump said Monday that U.S. military operations are projected to last four to five weeks, but cautioned “we have capability to go far longer than that.” He also told CNN that the operation’s “big wave” has yet to take place — remarks analysts suggest may be contributing to market volatility.
In retaliation, Iran struck a Saudi oil refinery that De Haan described as “a big player in diesel markets globally.” The attack added to concerns about supply chain disruption and elevated risk premiums across energy trading platforms.
Kloza emphasized that current price increases are driven largely by market apprehension rather than actual supply reductions.
“Right now, with quotes like that, you’re just not going to have anybody willing to sell into the marketplace. I think they probably would be smart if they did, but it’s just too risky,” he said.
Another focal point for traders is the Strait of Hormuz, a narrow maritime passage between Oman and Iran through which roughly 20% of global oil consumption flows daily. Any disruption there could significantly constrain supply.
“Should you travel the Strait of Hormuz, there’s a lot of risk right now in doing so. You don’t want to be targeted by Iran,” De Haan said.
“Shippers may be seeing a very high jump on the price of insurance that they have to carry — just a lot of challenges,” he added. “It’s probably just a bit easier instead of navigating those challenges to just hold on for the time being.”
Kloza expressed cautious optimism that shipping traffic would normalize once tensions ease, stating, “we’re going to see tankers moving through the strait once things calm down a little bit.”
He also suggested that energy markets could stabilize before the November midterm elections.
“Those within the administration, I think they believe that they can get a handle on this, and they can, they can restore reasonable flows in time for the midterms,” Kloza said.
“Those within the administration, I think they believe that they can get a handle on this, and they can, they can restore reasonable flows in time for the midterms,” Kloza said.
Longer-term outcomes remain uncertain. De Haan noted that if Iran experiences regime change and establishes a government more aligned with Western nations, oil prices could ultimately decline.
“If the future government or regime of Iran is more friendly to the West … it could actually push oil prices lower in the long run,” he said.
Meanwhile, Democratic lawmakers have criticized the administration’s actions, arguing they will exacerbate rising energy costs.
“The Trump administration just made ALL energy more expensive,” Sen. Martin Heinrich (D-N.M.) wrote on X, citing “Renewables: Permitting bottlenecks,” “Gas: Unbridled exports,” “Oil: War in Iran,” and “Coal: Mandated coal generation.”
