What to know about surge in gas, oil prices as Iran turmoil persists

The growing conflict in Iran, spearheaded by U.S. and Israeli strikes followed by retaliatory attacks by Iran on Gulf partners, has resulted in a surge in domestic gas and oil prices.

The U.S. national average for a gallon of regular gasoline jumped 14 percent since last week to $3.41 as of Saturday, according to data from AAA. This is the highest national average since April 2024, when the average peaked at $3.67.

Prices vary from state to state. West Coast states, Hawaii and Nevada are seeing some of the highest prices, with California topping the list at $5.07. Kansas is at the lowest end of the spectrum, at $2.90.

The motor club federation noted that Americans typically see higher gas prices going into the spring and summer when people travel and demand rises, adding that gas prices could soon rise higher.

Gasoline production saw an increase last week, with an average of 9.3 million per day, according to the Energy Information Administration‘s data. Demand, however, saw a decrease from 8.73 million barrels per day to 8.29 million.

Twenty percent of the world’s crude oil and natural gas mostly passes through the Strait of Hormuz, off Iran’s coast; the conflict has left the waterway effectively closed, Time reported.

Qatar’s Minister of Energy Saad Sherida al-Kaabi told the Financial Times on Friday that the conflict could lead to a halt in oil production across the Gulf states, which he said threatens to “bring down the economies of the world.”

“If this war continues for a few weeks, GDP growth around the world will be impacted,” he added. “Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”

This contrasts from Energy Secretary Chris Wright’s estimation on Friday that gas prices will fall within “weeks, not months.”

“We got a little bit of an interruption right now to finally put an end to their ability to wreak havoc, to kill Americans and to terrorize their neighbors,” he said on “Fox & Friends.”

President Trump, who touted about dropping gas prices in the months before the conflict and in his State of the Union address, told Reuters in an interview the day before that he is not concerned about it.

“They’ll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit,” the president added.

Calming tensions and the reopening of the Strait of Hormuz would likely bring prices back down, but even a “short-term increase in prices” will “still significantly squeeze people’s budgets, and you significantly impacted the economy,” Pacific Research Institute economist Wayne Winegarden told The New York Times Saturday.