US gasoline prices top $4, highest since 2022

Gasoline prices across the US crossed the significant $4 per gallon threshold on Monday for the first time in more than three years, driven by escalating conflict in the Middle East, though the national average later dipped slightly. 

According to GasBuddy, the price settled at $3.950 per gallon, while the American Automobile Association (AAA) reported a close of $3.990 per gallon.

The national average price at the gas pump reached $4.018, according to the travel association AAA, marking the highest point since August 2022, when global energy markets were disrupted by Russia's conflict with Ukraine. 

Unprecedented gasoline surge

Since the US and Israel attacked Iran in late February, AAA data shows that gas prices have surged by over 30%.

“Gasoline and diesel prices continue to climb to multi-year highs as the effective closure of the Strait of Hormuz curtails the flow of millions of barrels of crude oil each day,” GasBuddy’s head of petroleum analysis, Patrick De Haan, said in a Monday report.

“The situation remains highly volatile and unpredictable, but upward pressure on fuel prices is likely to persist as long as global oil supplies are constrained by the continued disruption in the Strait,” De Haan added. 

The national average for gasoline is expected to surpass $4 per gallon, De Haan said.

Furthermore, diesel prices could near $6 per gallon and potentially reach all-time highs if the current situation does not improve.

“Americans have already spent nearly $8 billion more on gasoline over the past month, a trend that poses growing risks to the broader economy, while surging diesel prices may begin to reaccelerate inflation.”

Geopolitical woes drive domestic prices

Fuel prices in the United States have spiked, following West Texas Intermediate (WTI) crude surpassing the $100 mark late last week and remaining in the triple digits.

At the time of writing, the May WTI contract on the New York Mercantile Exchange was 1.8% higher at $104.78 a barrel. 

This jump coincides with US President Donald Trump's aggressive weekend threat towards Iran. He declared that the US "will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinisation plants!), which we have purposefully not yet ‘touched.’"

Earlier today, the existing threat was amplified by news that Iran had attacked a fully laden Kuwaiti supertanker with a drone while the vessel was anchored at Dubai Port, causing it to catch fire. 

The Kuwaiti state oil company confirmed the ship was fully laden at the time of the attack.

Diesel costs and broader economic implications

Meanwhile, the price of diesel, a crucial fuel for the US economy's transport sector (trucks and freight trains), surpassed $5 per gallon on March 17.

This current price represents an increase of over 40% compared to pre-conflict levels, an increase that carries broad implications for the economy.

The most frequently reported diesel price in the US remained at $4.99 per gallon on Monday, showing no change from the previous week, according to GasBuddy data.

This price led the top five most common prices, which also included $4.79, $4.89, $4.69, and $4.59, the data showed.

The price of diesel shows a significant range across the country, with the most expensive 10% of stations averaging $6.30 per gallon, compared to an average of $4.51 per gallon at the cheapest 10%.

The average price for a gallon of diesel in the US is currently $5.25.

This represents a 26-cent increase from the previous week, yet it remains approximately 12 cents below the national average fuel price, GasBuddy said.