US oil prices have been hit by a double blow as Iran strikes and blockades simultaneously cripple global oil supply, sending pump prices toward record territory as the conflict enters its third week. Analyst Patrick De Haan projects that Monday’s US pump price could reach $3.85 per gallon, while $4 gasoline remains a near-term possibility. The confluence of targeted infrastructure attacks and strategic shipping blockades has created a supply crisis of unusual severity.
Before the first US-Israel strikes on Iran were carried out on February 28, Americans were paying less than $3 per gallon for regular gasoline. The conflict has since pushed the national average up 23% to $3.70, a rapid escalation driven by both the physical destruction of oil infrastructure and the uncertainty generated by the ongoing military campaign. The pace of the increase has drawn comparisons to previous oil price shocks in US history.
The US strike on Kharg Island on Friday targeted Iran’s central oil export processing facility, dealing another blow to global supply. Simultaneously, Iran’s continued closure of the Strait of Hormuz has blocked roughly 20% of the world’s daily oil supply from international markets. Brent crude fluctuated between $103 and $106 per barrel Monday, while US crude settled near $94 after briefly reaching $100 the prior day.
California consumers are facing the most extreme domestic price increases, with statewide averages above $5 per gallon and some Los Angeles stations pricing above $8. Commercial users of diesel face potential costs of $5.05 to $5.15 per gallon nationally. Oil company leaders including Exxon’s Darren Woods, and counterparts at Conoco and Chevron, have each raised urgent concerns with White House officials about supply disruption and the risk of speculative market activity amplifying price increases.
Wall Street staged a modest recovery Monday, with the S&P 500 gaining around 1% as oil prices briefly retreated. Oil company shares have surged to all-time highs since the conflict began, even as the broader economic impact of elevated energy costs becomes increasingly evident. The dual shock of infrastructure strikes and shipping blockades will continue to dominate US oil price dynamics until the conflict is resolved.