Gas prices eclipse $4 a gallon in the US, the highest since 2022

NEW YORK (AP) — U.S. gas prices jumped past an average of $4 a gallon for the first time since 2022 on Tuesday, as the Iran war pushes fuel prices to soar worldwide.

According to motor club AAA, the national average for a gallon of regular gasoline is now $4.02 — over a dollar more expensive than before the war began. The last time U.S. drivers were collectively paying this much at the pump was nearly four years ago, following Russia’s invasion of Ukraine.

The price is a national average, meaning drivers in some states have been paying well over $4 a gallon for a while now. Prices vary from state to state due to factors ranging from nearby supply to differing tax rates.

Since the U.S. and Israel launched the joint war against Iran on Feb. 28, the cost of crude oil — the main ingredient in gasoline — has spiked and swung rapidly. That’s because the conflict has caused deep supply chain disruptions and cuts from major oil producers across the Middle East. Both Brent crude, the international standard, and benchmark U.S. crude are now going for more than $100 per barrel — up from roughly $70 before the war.

Motorists around the world are also coping with higher gas prices. In Paris, for example, gas is at 2.34 euros per liter ($2.68), which is about $10.27 a gallon.

Expensive gas could drag on the economy and drive up other prices

Higher gas prices are impacting consumers and businesses as many households continue to face wider cost of living strains. And as drivers pay more to cover necessities like gas, or even utility bills impacted by soaring fuel costs, many may be forced to cut their budgets in other places.

“Americans (are) spending hundreds of millions of dollars more on gasoline every day,” said Patrick De Haan, the head of petroleum analysis at fuel-tracking service GasBuddy. That, he said, has a negative impact on the “psyche of the U.S. consumer,” which carries consequences for the economy overall.

Before launching the war, President Donald Trump bragged about keeping gas prices low. And consumer prices and the cost of living already have become flashpoints in this midterm election year, with Democrats hammering Trump and Republicans as the GOP tries to hold majorities on Capitol Hill. A recent AP-NORC poll found that 45% of U.S. adults are “extremely” or “very” concerned about being able to afford gas in the next few months, up from 30% shortly after Trump won the 2024 presidential election with promises to lower costs.

Beyond visits to the pump, analysts point to groceries, which have to be restocked frequently and could also see price hikes as businesses’ transportation and packaging costs pile up. Hauling other cargo and packages has also been impacted. The United Postal Service, for example, is seeking a temporary 8% added charge on some of its popular products including Priority Mail.

U.S. diesel prices — the fuel used for many freight and delivery trucks — is now going for an average of $5.45 a gallon, up from about $3.76 a gallon before the war began, per AAA.

“It’s going to mean more expensive bills for truckers, tractors and trains that move the U.S. economy with diesel fuel. It’s going to mean consumers are likely greeted by rising grocery prices — and broadly speaking, a rise in U.S. inflation,” said De Haan.

If the war drags on, it’s possible that those prices could tick up even higher. To Trump’s frustration, most tanker movement in the key Strait of Hormuz — where roughly one-fifth of the world’s oil onced sailed through — has ground to a halt. That’s led to cuts from major producers in the region who have no way of getting their crude to market. Meanwhile, Iran, Israel and the U.S. have all struck oil and gas facilities, worsening supply concerns.

Analysts like De Haan reiterate that all eyes are on the Strait of Hormuz — noting that if the waterway remains blocked for long enough, the U.S. average price for gasoline could climb toward $4.50 a gallon, or even approach the record $5 mark hit in 2022.

Reserves open in an effort to cut prices

In a search for some relief, the International Energy Agency pledged to release 400 million barrels of oil from emergency stockpiles of member nations. That includes the U.S., despite Trump initially downplaying the need for reserve oil.

The Trump administration has also eased sanctions to free up some oil from Venezuela, and temporarily Russia. The White House also says it’s waiving maritime shipping requirements under a more than century-old law, known as the Jones Act, for 60 days.

Still, a lot of factors contribute to gas prices.

Refineries buy crude oil in advance, meaning they could be processing more expensive oil for a while, and it will take time for any new supply to trickle down to consumers.

And while steep crude prices are a leading driver behind today’s surge, U.S. gas prices typically tick up a bit at this time of year. More drivers are hitting the road and trying to fuel up while they can, so there’s higher demand. Warming weather also brings a shift to summer blend fuel, which is more expensive to produce than winter blend.

And again, some states always have higher averages than others. On Tuesday, per AAA, California had the highest average at nearly $5.89 for a gallon of regular gas. Meanwhile, Oklahoma had the lowest at around $3.27 a gallon.

The US is an oil exporter, but it’s still affected by global prices

The U.S., which is a net oil exporter, hasn’t seen as stark a shock as other parts of the world that rely more heavily on fuel imports from the Middle East, notably Asia. But that doesn’t mean America is immune to price spikes.

Oil is a globally-traded commodity. And most of what the U.S. produces is light, sweet crude — but refineries on the East and West coasts are primarily designed to process heavier, sour product. As a result, the country also needs imports.

The U.S. average for regular gasoline climbed to its highest level of more than $5 a gallon in June 2022, nearly four months after the Ukraine war began and world leaders imposed sanctions against Russia, a leading oil producer.

Prices at the pump later fell from that record. Before Tuesday, per AAA data, the national average had stayed below the $4 mark since mid-August of 2022.