US gasoline prices surge 28% since Iran war began as Hormuz closure persists

Gasoline prices in the United States climbed to their highest level in four years on Tuesday as negotiations over the war in Iran showed little sign of resolution. The average price of a gallon of regular gasoline reached 4.17 dollars, according to data published by the American Automobile Association. The figure represents an increase of 1.19 dollars per gallon since the war began on February 28, amounting to a jump of roughly 28 percent over a period of approximately two months. The last sustained period during which the United States national average exceeded four dollars per gallon followed the Russian invasion of Ukraine in 2022, an episode that produced a comparable but ultimately shorter-lived price shock in fuel markets.

The war involving the United States, Israel, and Iran has produced one of the largest global oil shocks on record. The 2026 Strait of Hormuz crisis has been described as the largest disruption to world energy supply since the 1970s oil shocks and the largest in the history of the modern oil market. The pace of the price increase in the early weeks of the conflict was faster than anything seen during the Gulf War, the Iraq War, or the early months of the Russian war on Ukraine. The disruption to crude flows has fed directly through to retail fuel costs in the United States, where the national pump price has now broken above the four-dollar level on a sustained basis for the first time since the 2022 inflation peak.

How did Iranian closure of the Strait of Hormuz translate into the highest US pump prices in four years?

Gasoline prices reached a previous peak on April 9, immediately after the announcement of the Pakistan-brokered ceasefire on April 8 placed downward pressure on the retail average. In the period that followed, the American Automobile Association national average drifted lower as crude futures retraced from their March peaks. In recent days, prices have moved upward again as crude oil prices climbed in response to a continuing impasse in negotiations between Washington and Tehran. The reversal in the pump price trajectory illustrates how directly retail gasoline now tracks daily diplomatic developments rather than fundamental supply and demand conditions.

The Iranian closure of the Strait of Hormuz has been the central trigger of the current price environment. The Strait of Hormuz is a maritime trading route through which approximately one-fifth of global oil supply normally passes, including the bulk of crude exports from Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Qatar. Iranian forces under the Islamic Revolutionary Guard Corps have effectively blocked the strait since the start of the conflict on February 28, using a combination of warnings to commercial shipping, the boarding of merchant vessels, and the laying of sea mines. The United States Navy has enforced a blockade of Iranian ports since April 13, producing what has been characterised as a dual blockade in which neither side has been willing to lift its restrictions first.

Why has the Pakistan-brokered ceasefire failed to restore oil flows through the Strait of Hormuz?

The current ceasefire framework was brokered by Pakistan and announced on April 7 in Washington, with implementation taking effect on April 8 in the Middle East. The framework calls for an immediate halt to hostilities, the reopening of the Strait of Hormuz, and a 15 to 20 day period of negotiations between Iran and the United States, structured in two phases with the second phase intended to deliver a permanent settlement. The framework was negotiated through Pakistani Prime Minister Shehbaz Sharif and Pakistani Army Chief Field Marshal Asim Munir, working with United States Vice President JD Vance, United States special envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araghchi.

Talks between the United States and Iranian delegations were held in Islamabad on April 11. The discussions extended for 21 hours and concluded without an agreement, marking the highest-level direct engagement between the two countries since the 1979 Islamic Revolution. United States Vice President JD Vance announced after the conclusion of the talks that Iran had refused to accept the terms put forward by the United States. President Donald Trump subsequently stated that he no longer cared about negotiations and announced the United States naval blockade of Iranian ports.

United States President Donald Trump has since extended the ceasefire indefinitely. On April 25, President Donald Trump cancelled a planned trip by United States envoys Steve Witkoff and Jared Kushner to Pakistan for further talks with Iranian counterparts. President Donald Trump stated on his social media platform Truth Social that if Iran wished to talk, the Iranian side would have to call Washington. Iranian Foreign Minister Abbas Araghchi blamed the United States for the failure of the talks during a visit to Russia, citing what he described as excessive demands by United States negotiators. Both Washington and Tehran believe they hold the stronger position, producing a stalemate in which neither side has incentive to make the concessions required to reopen the strait.

What are the structural disagreements between Washington and Tehran on the Strait of Hormuz and uranium enrichment?

Iranian President Masoud Pezeshkian has stated that Iran will not enter forced negotiations under threats or blockade. Iran has indicated that the Strait of Hormuz will not be reopened until the United States lifts its naval blockade of Iranian ports and ends the war. The United States has demanded full freedom of navigation through the strait as a precondition to lifting the blockade. Iran has separately floated the possibility of levying tolls on shipping passing through the strait, a proposal opposed by Gulf Cooperation Council states that export the bulk of their petroleum through the waterway. Iran maintains that the strait lies within Iranian and Omani territorial waters and that Iranian sovereignty over the waterway is non-negotiable.

The dispute over uranium enrichment forms a parallel obstacle. The Iranian government has stated that it must retain the right to enrich uranium, although the level and amount of enrichment is described as negotiable. Under the 2015 Joint Comprehensive Plan of Action, Iran had agreed to cap enrichment at 3.67 percent purity and to limit its stockpile of enriched uranium to 300 kilograms for 15 years. The International Atomic Energy Agency verified in early June 2025 that Iran held more than 400 kilograms of uranium enriched to 60 percent purity. President Donald Trump has stated that there will be no enrichment of uranium under any final agreement, a position that Iran has not accepted. The 2015 deal itself took roughly two years to negotiate and required extensive backchannel diplomacy facilitated by Oman, a precedent that policy analysts have cited as evidence that the current impasse does not in itself indicate the end of diplomatic prospects.

How has the disruption to crude flows fed through to global oil prices and US retail gasoline?

The closure of the Strait of Hormuz has substantially reduced the volume of crude oil reaching global markets. The United States Energy Information Administration has reported that production shut-ins linked to the closure averaged 7.5 million barrels per day in March and were expected to peak at approximately 9.1 million barrels per day in April. The Brent crude spot price averaged 103 dollars per barrel in March, 32 dollars higher than the February average, and reached almost 128 dollars per barrel on April 2. The United States Energy Information Administration has projected that the Brent crude price will peak at approximately 115 dollars per barrel in the second quarter of 2026 before gradually easing as production shut-ins abate, with the agency forecasting that Brent will fall below 90 dollars per barrel in the fourth quarter of 2026 and average 76 dollars per barrel in 2027.

On April 28, West Texas Intermediate futures rose by more than 3 percent to settle at 99.93 dollars per barrel, while Brent crude futures advanced by nearly 3 percent to settle at 111.26 dollars per barrel. The price movement reflected reports that President Donald Trump had told advisers he was not satisfied with the latest Iranian proposal to reopen the Strait of Hormuz. The United States Energy Information Administration has forecast that the United States retail gasoline price will peak at a monthly average of close to 4.30 dollars per gallon in April and average more than 3.70 dollars per gallon across 2026 as a whole. Diesel prices, which remain particularly sensitive to global supply tightness, are projected to peak above 5.80 dollars per gallon in April.

What downstream commodity disruptions are flowing from the Strait of Hormuz closure?

Andy Lipow, president of Lipow Oil Associates, has stated that approximately 20 million barrels per day of crude, fuels, and petrochemicals remain affected by the disruption to flows through the Strait of Hormuz. Andy Lipow has further indicated that even if hostilities ended immediately, oil markets would require at least four to six months to stabilise, given the time required to clear sea mines, ease tanker congestion, and gradually restart production and refining capacity. The International Energy Agency released 400 million barrels of oil from member state strategic reserves on March 11, representing approximately four days of global consumption, in an effort to dampen the price spike. The United States additionally suspended the embargo on 30 Russia-linked petroleum tankers in Asia until April 11, releasing approximately 19 million barrels onto the market.

The downstream effects of the disruption have extended well beyond crude oil. The closure of the Strait of Hormuz has reduced flows of liquefied natural gas from Qatar, which has sharply widened the spread between the United States Henry Hub benchmark and import prices in Europe and Asia. United States liquefied natural gas export facilities are running at near-peak capacity, exporting nearly 18 billion cubic feet per day, but cannot fully replace the lost Qatari volumes in the short term. Helium markets, in which Qatar is a major producer and which depend on time-sensitive transportation through the strait, have moved into rationing as of early April. Fertiliser markets have tightened given that approximately one-third of global fertiliser flows pass through the strait and Gulf states produce nearly half of global urea and 30 percent of ammonia. Aluminium prices have risen modestly as Gulf states account for approximately 20 percent of raw aluminium exports and 8 percent of global production. The United States defence industry has reported near-total disruption to critical mineral supply, particularly sulfur, with knock-on effects extending to copper production in Chile through the Chinese ban on sulfuric acid exports.

How has the United States summer driving season collided with the worst oil supply shock since the 1970s?

Regional gasoline prices in the United States have varied significantly across the national market. The Philadelphia metropolitan area average rose by 15 cents between Monday and Tuesday to reach 4.27 dollars per gallon. The South Jersey and Delaware regional averages rose by 14 and 15 cents respectively over the same period. The most expensive gasoline markets in the country include California at 5.89 dollars per gallon, Hawaii at 5.50 dollars, Washington at 5.36 dollars, and Oregon at 4.96 dollars. California briefly exceeded 5 dollars per gallon as early as the second week of March, immediately after the initial Iranian closure of the strait took effect.

The continuing closure of the Strait of Hormuz, combined with the apparent stalling of the Pakistan-mediated negotiations, has created sustained upward pressure on retail fuel prices ahead of the United States summer driving season. The seasonal switch to summer-grade gasoline blends typically tightens the United States retail market in May and June even under normal supply conditions, and the additional pressure from the Hormuz disruption has produced what fuel market analysts have characterised as the most challenging summer driving season for United States consumers since 2008. The United States Strategic Petroleum Reserve release announced on March 11 has been factored into United States Energy Information Administration baseline projections, although the agency continues to maintain a risk premium on crude prices throughout its forecast period to reflect the uncertainty around future supply disruptions.

What does the Iranian leverage over global energy flows mean for the broader world economy?

Iranian Deputy Parliament Speaker Ali Nikzad has stated that Iran retains the capability to affect approximately 25 percent of the world economy by maintaining pressure on the Strait of Hormuz and the Bab al-Mandab strait simultaneously. The International Energy Agency, headed by Fatih Birol, has described the situation as the largest energy security threat the agency has ever faced. Commonwealth Bank of Australia analysts have written that the longer the strait remains closed, the greater the economic costs, raising the likelihood that one side will be forced to back down. The bank has assessed that the United States is more likely than Iran to be forced to back down first because of mounting political and economic costs, although the analysts have added that the risk of major military escalation remains material.

The United Nations Conference on Trade and Development has warned that the financial ramifications for developing countries include falling stock prices, weakening currencies, and rising costs of external debt servicing. Trade and growth projections for 2026 have been revised downward by multiple international agencies. Asian importers, particularly India and China, face the greatest exposure to sustained price volatility given their dependence on Gulf crude. European natural gas prices have surged in parallel with oil prices, with wholesale gas prices in the United Kingdom moving sharply upward in early March and exposing the country’s reliance on imported energy. The current standoff in the Strait of Hormuz, in the assessment of multiple energy market participants, represents the convergence of geopolitical conflict, energy security, and global macroeconomic risk on a scale not seen since the 1970s.

What are the key takeaways from the surge in US gasoline prices to a four-year high amid the Iran war impasse?

• The United States national average gasoline price reached 4.17 dollars per gallon on April 28, 2026, the highest level in four years and an increase of 1.19 dollars per gallon since the war began on February 28.
• Iranian closure of the Strait of Hormuz has disrupted approximately 20 million barrels per day of crude, fuels, and petrochemicals, producing the largest oil supply shock since the 1970s.
• The Pakistan-brokered ceasefire announced on April 8 has held in broad terms, but talks held in Islamabad on April 11 ended without agreement after 21 hours, and President Donald Trump cancelled a planned envoy visit on April 25.
• Brent crude futures settled at 111.26 dollars per barrel on April 28, with the United States Energy Information Administration forecasting a peak of 115 dollars per barrel in the second quarter of 2026.
• Iranian President Masoud Pezeshkian has refused to reopen the strait until the United States lifts its naval blockade of Iranian ports, while President Donald Trump has demanded full freedom of navigation as a precondition.