US gasoline prices crossed $4 per gallon on Tuesday for the first time in more than three years, as the US-Israel war on Iran squeezes consumers and roils global energy markets.
The nationwide average hit $4.018 per gallon, per the American Automobile Association, up from $3.990 the previous day — the highest since August 2022. Gasoline climbed more than 30%, or roughly $1 a gallon, since the US and Israel launched strikes on Iran on February 28. Diesel surged even faster, jumping more than 40% to $5.454 per gallon.
GasBuddy estimated Americans spent nearly $8 billion more on gasoline over the past month.
Sponsored · Cambria Gold Mines
“The full effects of the higher diesel prices has yet to be felt, and that will flow through the economy over the next few months,” said Andy Lipow, president of Lipow Oil Associates.
Days after the US-Israel strikes began, Iran shut the Strait of Hormuz — through which 20% of the world’s oil normally flows — in retaliation. The International Energy Agency called it the biggest oil supply shock in history. WTI crude settled at $102.88 a barrel on Monday, up from roughly $59 at the start of the year, while Brent traded around $112. GasBuddy’s Patrick De Haan warned prices could hit a record $5 per gallon if the bottleneck persists, calling it “a race against time.”
At $4 a gallon, pump prices become a political emergency — and Republicans defending thin congressional majorities in November are now watching every cent. A CBS News poll from March 22 found 90% of respondents expected the war to push prices higher, while 85% already reported increases at the pump.
The Trump administration issued a 60-day Jones Act waiver and tapped 172 million barrels from the Strategic Petroleum Reserve. Congress is weighing a federal fuel excise tax suspension that would cut about 18 cents per gallon on gasoline and 24 cents on diesel, according to CNBC. Raymond James analyst Pavel Molchanov told Reuters he expects prices to start cooling within weeks — a shorter run than the 23 weeks above $4 in 2022.
Sponsored · Altamira Gold Corp.
Pakistan stepped in as the primary intermediary between Washington and Tehran, with Foreign Minister Ishaq Dar saying both sides backed Islamabad as a venue for direct talks “in the coming days,” Al Jazeera reported. Trump extended a strike pause on Iranian energy infrastructure to April 6 and said talks were “going very well.” Special envoy Steve Witkoff confirmed negotiations moved through Pakistani channels.
Related: Pakistan Turns to Beijing as Iran Seeks Guarantor for Any US Deal
Tehran pushed back, calling the US 15-point ceasefire proposal — which demands a one-month truce and the dismantling of Iran’s nuclear facilities — “very excessive, unrealistic, and unreasonable.”
Related: Trump Signals Willingness to End Iran War Without Reopening Hormuz, Markets Swing
Trump claimed Iran agreed to “most of” the demands and sent oil to “prove they’re serious.” Tehran did not confirm either claim. Trump threatened strikes on Iranian power plants and civilian infrastructure if no deal lands by April 6.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
